- Welcome to the reading nook of my flat,
aka my new filming corner.
It's like I've got a professional set,
this is amazing, I love it.
So I said I would make this video, so here we are.
How I bought a flat in London.
I've been getting a lot of questions,
just how, how did you do it.
Because I am 26 years old, other than my married friends,
I am the only person within my peer group of people,
my age who has purchased property.
So it's kind of a big deal and a bit of an anomaly.
So we are going to get technical in this video,
I'm gonna be talking mortgages and Help to Buy,
and all of that yummy stuff that I learnt all about
and had no idea about before going through this process.
But now, feel like a wizard, I've got all this knowledge.
But the crux of it, of how I managed to buy a flat in London
is hard work, savings, money from family,
Help to Buy and getting a mortgage.
Those were all of the things that were in place
for me to be in the position.
And I just want to take this moment to acknowledge
the luck that I have and the privilege that I have
because I had this money from family.
So thank you parents, and grandparents,
much appreciated you're welcome to come stay any time.
Other disclaimer I bought this myself,
my partner lives here with me but it is mine.
If I keep looking down it's because I have notes
and there's a lot, there's a lot of stuff.
So first of all I'm gonna take you through
an overview of the process, the timeline of events
and what happened and then I'm gonna talk about
Help to Buy and how that works
for anyone who is confused about that.
And then I'm gonna talk about the mortgage side of things,
specifically trying to get a mortgage as a freelancer,
and then I've got some FAQ's to answer as well.
And hopefully by talking about all of that
I'll have covered everything.
So the process, it started with me having
a very good business year and knowing that
I had this money from family that I was like,
ooh, I might look into buying a flat
and seeing if the money that I have
could stretch that far, we'll see.
So I started to figure out what my budget was
and what I could maybe afford if I was looking to buy.
Turns out I love looking at real estate,
even before I was seriously considering buying
I would be on Zoopla, I would be on Rightmove
and I would just be looking at all of the properties
and I would often set it to most expensive
just to see and do you know what.
I love me a good floor plan.
I went to a couple viewings of new builds
to get an idea of what that was like.
One of them was completely out of my price range,
but I had good conversations with the mortgage advisor
there and the estate agent there
that I then, going into the next one,
had a better idea of questions to ask
and the things that I needed to have prepared beforehand.
This was 10 to 12 months before
we would have hypothetically been moving,
and Dan was just like to me, stop, just stop stressing.
We don't need to think about this right now.
So I promised that I wouldn't look at anything
until after Christmas and I was just gonna take a break.
I obviously did not keep my promise
because I found myself on more websites
around September time and that is when I found this.
It was perfect, they were launching the development
and having the first initial viewing in one week
or two weeks time from when I found it.
And I was just like, oh my God, this is it.
I went of my mortgage advisor and I was like,
I think I've found the one, can you do everything for me
so I am in the best position possible going in
so no one steals it from me.
Before I went to look at it me and Dan sat down
with the brochure, we looked through it.
Obviously because I was buying it,
it was ultimately my decision but because he
was gonna be living with me I was like,
what do you think, and also his dad
is a structural engineer, so knows a lot about buildings.
So that was really helpful.
I went by myself on the open day thing,
and I looked around and I was like, yes, great,
I want it, filled out the form and then it was on the Monday
that I transferred the 500 pounds.
With Help to Buy is that to reserve it,
it doesn't mean that you've bought it or anything,
but to reserve it you just pay 500 pounds,
and you fill out a little form.
Then it was a few months of applying for the mortgage
and doing all that and getting the contracts ready,
and figuring out all that, dah dah dah.
And then in December was when we exchanged contracts.
So that's when you'll kind of buy the property,
or you promise to buy the property
and I paid 5% of the deposit I think at that point.
So a big chunk of money just went off, goodbye.
And I actually remember sending the money
just as I was getting really ill.
So I spent four weeks in hospital
starting from the 29th December, and leading up to that
I was super ill as well.
And I remember exchanging contracts from bed,
being really ill and sending the money on online banking,
just like uh.
And then after my surgery was when we got the letter
through the post, obviously I got emails as well,
but there was the official letter too,
that was congratulations you've exchanged.
And Dan brought it to the hospital for me,
and I was in my hospital bed just holding it, like yes.
So what a time, very dramatic.
So then we exchanged in December,
and we were due to complete in March.
Now completion is where you hand over
the rest of the money, you hand over
all of your deposit and they hand you the keys.
So completion was due at the end of March,
and it was mid-March and we were like,
are we moving, what's happening?
And the estate agent would just like, we don't know.
It's been delayed, there was just no answers,
and it was very confusing, but they were like any day now.
It will be soon, any day now.
And basically they told us every week that it would be
any day now, soon, soon, soon for five months.
So we were just in limbo, it was horrible.
I hated it, I hated it, it was so stressful.
And then I had another surgery during that time as well.
This year has not been fun, but then finally,
on the 6th September we moved in.
(cheering)
So we got the notice to complete a week or two before that.
But finally, finally, it all happened.
Apparently it was just all paperwork at the council,
and it was the council was being really slow
to get everything signed off because obviously
it was a new build.
So the building was actually done, the building was finished
but you know, that was what the developers were saying.
So maybe, maybe some of it was there fault too,
who knows, who knows.
But doesn't matter now, because we're in.
So that was the process and actually one of the questions
that I got on Twitter was about
what was the timeline of start to finish?
So it was about a year, so from finding this property online
to moving in it was about 12 months.
But from thinking about moving and playing around
with options and figuring out what I could afford
to moving in longer then that,
maybe a few months, six months, longer then that.
Okay so Help to Buy, this is the reason why
I could afford this place.
So there are two different kinds of Help to Buy.
There's the Help to Buy ISA which a lot of you
may have heard of which is where you put
up to 200 pounds a month into an ISA savings account
and then you can use that towards a house deposit
and the Government will give you a percentage of that
added to it, so the Government will give you
a bunch of cash.
That's not what I did, I did the Help to Buy
equity loan, this is when the Government
basically pay for a percentage of the property.
So the Government own that percentage of the property
and if I were to ever sell it the Government
would either make a profit or a loss also
on their percentage.
If you are outside of London,
the Government can buy up to 30% of the property,
if you're in London it's 40%.
So I did the full 40%, so I only actually own
and have a mortgage for 60% of this property,
40% of it is my Help to Buy loan.
The way that a Help to Buy loan works
is that it is interest free for five years.
So I am paying nothing on this loan right now,
and then on year six I start paying interest only.
The only way that I can buy them out to get more
of their share and reduce their share
is by buying it in 10% chunks.
It's 10% of whatever the current value is.
So this is my Brexit fail safe.
So fingers crossed prices just go up,
even though that's just bad for everyone else.
But fingers crossed this property doesn't reduce in value
because that wouldn't be great for me.
But if it does because of Brexit potentially
then I can use that opportunity to buy
the Government bit out.
I don't know, we'll see, this is my plan.
Who knows, Brexit might screw us all over, it might not.
So with Help to Buy, in order to be eligible
you have to be a first time buyer in the UK,
you have to put a £500 reserve fee down.
You have to have at least 5% deposit,
and you have to be living in that property,
and you can't have another property,
it has to be your only property.
So I can't now just buy somewhere else.
So Help to Buy makes up 40% of this property.
60% of it is my cash deposit and my mortgage.
So now let's talk about mortgages.
Is this what you were expecting
when you signed up for a sex education channel?
I know it is, uh huh.
So the mortgage was probably
by far the most stressful thing ever.
Literally the mortgage advisor came round to my flat
and was there for four hours.
We were going through everything for four hours
in order to fill out all the forms
and figure out which mortgage would be best for me.
So my situation was a bit unique,
as being a freelancer, although probably not
that unique nowadays, loads of people are freelancers.
But it does make it a bit difficult
because you don't necessarily have a fixed salary
that you can be like this is how much I earn a year
and it is guaranteed because I have a contract
with my employer who pays me that salary every year.
No, if you are freelance or self employed,
or have a limited company it is ideal for you to have
at least two years worth of records, at least.
When I was applying for a mortgage,
I'd actually recently just switched to
being a limited company from being self employed
which just meant it was a hot mess
and no one wanted to loan me money.
There were only two banks, I only had two options
of mortgages that would loan me money.
One they would loan me a lot more money,
but at a much higher interest rate
and the other one, they would loan me less money
at a lower interest rate.
I ended up going for the less money one,
but what that meant was that I had to come up
with a huge cash deposit.
So the minimum cash deposit you need
if you're buying through Help to Buy is 5%,
mine was much more then that.
Just because that was the only way
I would be able to afford this.
And that is when, thank you, thank you,
parents and grandparents, that money came in.
And then also my own savings.
What I'm paying now is just over half
of what I was paying for one room in a flat share rent.
So I am paying a lot less per month now,
but obviously I'm now in a lot of debt
because I have a huge mortgage and a student loan, oh God.
So that is logistically kind of how it all worked.
Okay so I think that is everything,
but I had a few general questions
that I got on Twitter that I thought I would help answer.
If you have anymore questions, if you've got more stuff
that you want to know that I haven't answered
in this video then please do let me know in the comments
and I'll try my best to answer as many as I can.
So the first one is, how did you decide on an area?
I had a general idea of a very large area,
and it was because I used to live near here
when I first moved to London.
But I knew that I wouldn't be able
to afford to live there because it was too close to central
and so I basically was just like, kind of this area,
but a bit further out.
I love this area, it's not very cool
but it's very convenient.
It's got some neighbouring cool areas so you know,
that's good enough for me.
Why buy instead of renting?
So it's kind of up to you in terms of what you want to do,
I don't think it's super necessary to buy,
in fact it's really stressful and expensive.
But for me, I was lucky enough that I had
the cash deposit, I probably would have been
equally as happy just carrying on renting,
and maybe getting a better place and paying more for that.
I don't think there is a perfect time, I just decided too.
How does it work owning a flat that is part
of a multi-unit building?
Great question.
I own the lease hold but the ground,
the land that this building is on we don't own.
That is the freehold and someone else
owns the freehold and we have to pay ground rent.
That's also when you are living in a block,
a thing called service charge.
So service charge pays for all of the communal areas,
cleaning and lift maintenance,
and then we have like a communal garden,
so then I'm amusing there's a gardener
and it also pays for that, but yeah great question.
How much did you know about getting a mortgage beforehand?
I didn't know a huge amount but I had a basic understanding
and then as I started talking to a mortgage advisor
and just going through the process I would just read
a lot online.
Money Saving Expert is a great website
and has loads of info about all financial things
for the UK specifically.
And I would just make sure that every conversation
I had with the mortgage advisor I would understand
what they were telling me
before we moved on to the next thing.
Don't be scared of it.
I think if you're going into this process,
yes there is a lot to learn, it's a big learning curve,
but there are people who's job it is
to basically help you make the choices
and understand what your options are.
This video is super long, if you have anymore questions
like I said, do leave them in the comments
and I'll try my best to answer them.
Please give this video a thumbs up if you enjoyed it,
and hopefully we'll have some more videos
in my new filming corner, I'm so excited.
I built this, I built this, good old Ikea.
Don't forget to subscribe because I make new videos
every week and I'll see you soon, bye.
(upbeat techno music)