Before you potentially get excited about this picture– no, we did not buy this flat. We did view it, actually, but didn’t go for it in the end (it’s sold now, sorry). Walking away from cool like flats like this is just one of many not-so-great moments in our house hunting journey.
Last post, I mentioned that we would no longer be getting the flat we made an offer on in Croydon. This was a tough decision because it meant starting our hunt over and it’s not exactly like we’re spoilt for choice. London is a brutal housing market and with this being our first home purchase, we were faced with all of the challenges of (I’m going to use this obnoxious phrase) getting on the housing ladder. I wanted to share this post because even though I know it’s a tough market, I haven’t really felt the camaraderie around how much it sucks with any people I know/follow. Hopefully I can offer a little insight into what I’ve discovered so far.
1. Challenge: Timing
Solution: Buy as soon as you’re able to
In 2013, we started looking to buy our first flat. We did not prepare like we should have, so basically visited one bank to find out how much we could borrow and started looking. We thought it was hard to find a one bedroom back then, but eventually put an offer in on one flat only to find out it had Japanese knot wood in the garden. We had to pull out, as that’s a huge NO. After that, we gave up. Fast forward 4 years, and houses are even less affordable and we now have a baby, so need a second bedroom. I think about how we should have just knuckled down and found a flat back then and we would be in a better position now– ugh! Buy a house as soon as you are able to and don’t make this mistake. Rent will get more expensive, buying gets more expensive, and as time passes, you run the risk of getting priced out of both in the areas you want to be in.
2. Challenge: Deposit and stamp duty money
Potential Solution: Get assistance
In my opinion, the deposit (typically 10%) is what really determines how much house you can afford. If you qualify for a £1million mortgage and can only afford to put down £20k in a deposit, guess what? You’re getting a £200k house. Some mortgage lenders will let you put down 5%, but it’s best to work with 10% in mind. On top of the deposit, there are other up-front fees. Stamp duty is a 2-10% tax, depending on the cost of the house. You also need to have a survey, pay a solicitor, moving costs, etc. Suddenly that £20k you saved up is looking more like a £15k deposit, and now you can only afford a £150k house. Good luck with that in London. I strongly recommend finding a good mortgage broker to help you reach your best borrowing potential. They can look through all of the numbers and find you your best lendor.
You can always hope that some long, lost rich relative leaves you a bunch of money (and I do hope that every day), but there are practical things you can do to help with this too. There are two government Help to Buy schemes: one helps you get an additional £6k towards buying your home with an ISA, and the other helps you afford a more expensive new build by the government loaning you 40% of the cost and you only having to put down a 5% deposit. Each of these have annoying things to take into consideration, but if you’re facing few options, these are definitely worth exploring.
3. Challenge: Finding the “one”
Solution: Have an open mind
You’ve got your coins together, your broker told you what you can afford, and now you’re ready to buy your first house– awesome! You jump on Rightmove or Zoopla obsessively looking, but what areas do you search? I started with areas near to where we live now and quickly realised we’re peasants who apparently don’t even deserve to be renting here. From there, I started looking at surrounding areas and researching various spots around London that are nice or on the come-up. Wouldn’t you know we could only afford to buy in places we didn’t want to move? I had to get more creative with my searching, and I had to change my attitude before we started to find flats worth seeing.
My first tip would be to only look in areas you would actually consider viewing. I say this because I would look online at flats in the opposite end of London and could not be bothered to coordinate a viewing. You need to get out and start viewing as soon as possible so you can start getting an idea of what matters to you. You’ll get a sense of different areas to live, what you value in a house, and how far your money can go. I also advise searching at a price a bit higher than your affordability because you might find something you can negotiate down. Check the listing date– if the property was listed a while ago, you may have a good chance at getting a good deal.
Try to see past what a flat currently looks like and find the potential. People do crazy things with decor sometimes, but you have to imagine how you can put your own stank on it. Also if you want to live in an area a bit out of your price range, finding a fixer-upper could be your way in. If you don’t mind doing work, you can benefit from buying the worst house on the best street. Your hard work will be rewarded when you go to sell.
Finally, regarding your wishlist of things in a house, if this is your first flat and you aren’t rich, you will likely compromise on some things. You need to think about the things that matter to you the most and be flexible on the rest. When you buy your next home (or the one after), you can hopefully be more picky.
The game is still on for us. As evidenced by our experience, the process doesn’t end when you make an offer. I just want you to know that I’ve felt the crushing fear of never being able to buy a house too, and these are a few things that have helped me. If I had to single any one thing out, it would be our amazing saviour of a broker who has been a fountain of knowledge. Find yourself a good one and they can really help you. Good luck, hunters!