Welcome to Money Diaries, where we're tackling what might be the last taboo facing modern working women: money.
As everyone knows, we're in the middle of a housing crisis. Millennials are finding it harder than ever to get their feet on the property ladder. Many are struggling to save for a deposit, an increasing number are turning to their parents for help while the rest of us are losing huge amounts of money in exorbitant rent each month.
We decided to profile several different women who went about purchasing their house in different ways. This week, we're with a woman who, at 23, was able to buy her first flat, with help from her parents and money she was able to save living at home. She acknowledges how lucky she was to have this help and realises that, without it, she wouldn't have been able to buy.
Age: 23 when I bought the flat
Job: IT product manager
Salary: £41,000
House price: £185,500
Location: Kent, just outside London. About 10 minutes from my parents’ house and halfway between the motorway and the nearest station. I currently drive to work so I need to be near the motorway, but I knew I’d be living here a while so being near a station was important for getting into London at the weekend. In the end I paid less for a place outside of walking distance from the station but on a good bus route.
House type: It’s a purpose-built one-bedroom, one-bathroom flat. It was new about two years before I bought it off the first owner. There are a lot of new builds in my area and they’re all being done to a really high specification but that meant they were considerably more expensive.
Mortgage type: I took a standard mortgage with five years' fixed interest. I considered using Help to Buy, but I didn’t want to stretch myself with the monthly payments for a more expensive place. I wanted fixed payments for longer, though now my bank is offering much lower interest mortgages I’ll be looking at my options after two years to see whether lower payments would offset any early remortgaging fees.
Did you buy this house by yourself or with a partner/friend? I bought it myself.
Why did you decide to buy the house? I wanted to get onto the ladder as soon as I could, and family circumstances meant I had access to a good deposit. I’ll be honest though, I only looked at this flat and one other... and this one was perfect, so I made an offer and had it accepted in two days! I knew I wanted something I could afford to live in alone and without much work to be done, which there aren’t many of around here, so I jumped on it.
Deposit
How much was your deposit and where did it come from? I was extremely lucky that my parents gave me £50,000 as a deposit. They’d saved all their married lives for it so my sibling and I could each get on the property ladder; I wouldn’t have been in a position to buy at this age without help from my parents. I’m really grateful to them because I know they missed out on a lot to be able to help us out so generously.
How long had you been saving for and how did you manage to save? I saved around £10,000 of my own in just under two years while I was living with family for minimal rent. I used this to pay for conveyancing, stamp duty, the mortgage fee and some furnishings.
Total: £50,000
Mortgage
Mortgage advisor fee: n/a
Mortgage booking fee: n/a
Mortgage arrangement fee: £999. I opted to pay for this upfront so it wasn’t added to my mortgage. I had planned to add it to the amount I borrowed but after doing some research about how much the interest adds up I was paranoid about it. It seemed like a good idea to pay it straightaway but it was £999 out of my own savings that I hadn’t planned to spend.
Mortgage valuation fee: n/a – included with the mortgage
Total: £999
Buying Fees
Stamp duty: £1,210
Surveyor’s fee: We didn't have one as the property was only two years old when I bought it, I just had the standard bank valuation carried out. It’s still covered under the 10-year new homes guarantee.
Legal fees: £2,500. I was so excited to have my offer accepted and it asked me for my solicitor's details, so I used the recommended company from the estate agent. I realised afterwards I could have saved a lot of money if I’d looked around a little beforehand.
Electronic transfer fee: £50. It was these sort of fees I didn’t pay much attention to. In the grand scheme of things it wasn’t a huge amount of money, but I wish I’d been more mindful when I started budgeting. It also came as a shock when I realised my bank wouldn’t authorise transactions over £10,000 in one day when I was transferring my deposit. I’d never contemplated that amount of money coming in and out of my account, so I hadn’t checked how much it would cost to move around.
Estate agent's fee: £0 as I was a first-time buyer.
Total: £3,760
Post-buying Costs
Moving costs: £50 for petrol. I didn’t have any of my own furniture, so I just moved all my clothes and books in my car. I had all my new furniture delivered to the new flat.
Work done on the house before moving in: £100. My mum and I spent about three days cleaning the entire flat so I didn’t have to pay anyone professionally. It just cost me a pizza and a bottle of wine in return! The only professional cleaning I had done was my oven, which the seller had left in a disgusting state, so I paid £60 to have it deep cleaned. It was the most grown-up I’ve ever felt, even after buying a property! I also painted the bedroom and living room as it was very neutral before so I wanted to put my own stamp on it.
Work done on the house after moving in: £60. I’d bought a beautiful glittery bathroom cabinet that weighed about 15kg… to go on plasterboard. I had to pay someone to put it up just to have peace of mind it wasn’t going to fall down. The rest of the flat was in fairly good condition so there wasn’t any work to be done.
Items bought for the house after moving in: £7,500. Even though I’d saved plenty of money theoretically, I went way over when furnishing my flat. I’d budgeted really strictly for all the big pieces of furniture and bought things secondhand where I could, but I didn’t realise how quickly things for the kitchen and soft furnishings would add up. Do you know how much curtains and light fittings cost?! I started putting a few things on my credit card. I’d always paid it off in full before, so I figured I’d do the same going forwards. But £200 became £2,000 really quickly and I’m still paying it off now – I always exceed my minimum payments but the mortgage will always be the priority now. Sometimes I wish I’d controlled myself a bit more, but I love everything I bought for my flat so I can’t say I regret it.
Mail redirection: £0 – I was living with family before, so I didn’t worry too much about whether all my mail was changed over immediately.
Total: £7,710
Ongoing Costs
Insurance: £90 a year (£7.50 per month) paid upfront for contents insurance – as it’s a leasehold property, the property management company has buildings insurance so I only needed contents insurance. Another thing on my credit card though. I also had to pay £100 to my car insurer as my new address was more expensive to insure, plus a £25 admin fee, and I added critical illness cover to my mortgage for £21 a month so that if I can’t work for a period of time, my mortgage will be paid.
Council tax: £105 a month (includes a 25% discount because I live alone).
Bills: Around £170 including satellite TV. I had real problems setting the bills up when I moved in and the water company didn’t realise there was even a flat at my address (the woman I bought it from never paid a water bill!), so when I finally got it sorted I had to pay off what I’d used since I moved in, so my bills are slightly higher for now. My internet is also supplied by a company which has a contract for the development I live in, so I couldn’t shop around for a cheaper broadband deal or package it with my TV.
Monthly mortgage payment: £611
Leaseholders cost: It depends on the annual management company budget but around £90 a month, plus £60 twice a year ground rent.
Total: £1,014.50 a month (+£125 one-off for car insurance)
The Breakdown:
Deposit: £50,000
Mortgage: £999
Buying Fees: £3,760
Post-buying Costs: £7,710
Ongoing Costs: £1,014.50 a month (+£125 one-off for car insurance)
Total: £63,608.50 – so, almost £65,000.
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