mistakes I made when buying my first flat... don't do these
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- เผยแพร่เมื่อ 14 ส.ค. 2024
- AD ・ It's been a year since my boyfriend and I bought this flat, so I thought I'd share every embarrassing mistake we made when buying!
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Edited by Josiah Williams.
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As someone who bought a flat 2 yrs ago, you absolutely can find out the maintenance/service fees before you buy! just ask. You'll actually likely need them to truthfully apply for your mortgage as you need to give all your monthly outgoings, like childcare fees etc.
Great video! I would add that you can usually ask the estate agent for information on the service fees during the purchase process so it wouldn't be a complete surprise once you move in!
Stamp duty is not relevant for *most* first time buyers (particularly those outside of London).
It’s only applicable for properties over £425,000.
In Wales I think it is 6% after £225 000, so can affect more first time buyers
Yep gazuming was a shock for us, too. We were already going through paperwork, paid for solicitor etc after offer was accepted when I noticed the listing was still up. Estate agent took down the listing after a few panicky emails. So important people know this!
8:42 Just wanted to say that you can ask the estate agent to remove the listing as part of your offer conditions. Reduces the chances of being gazumped!
this video was so useful - you don’t sound ungrateful at all, it’s totally understandable how youre feeling regarding the unprecedented situations you’re having to navigate and thank you for sharing your experience! :)
I think its very generous of you to talk honestly about your experience and I'm sure it will help a lot of people go into buying a leasehold flat with more understanding of the costs. Thanks for being so open xx
Hi Lucy,
maybe this will help you and your viewers. I'm a similar age, purchased shortly before you, and own my first property, a "share of freehold" flat in London. This means I have a share of the freehold (building), and also have a leasehold on a flat within the property. We self manage the freehold between all shareholders (there is only five of us) and don't outsource this a property management company, but the regulations of a leaseholder still also apply to me. I think, provided the other freeholders are quite "good", it's a decent compromise, but it does mean we all have to do more work, such as any maintance, searching for builders, insurance etc.
I have read that there will be a change in leasehold/freehold legislation coming in the next months, due to the insanity that is some of the freeholders service charges and all of the lack of transparency that you described. I'm unsure if it will apply to you directly, but it may be something for anyone looking to purchase to consider!
x
This is such a helpful video. I’m Canadian and when I hear British TH-camrs talk about their home buying experiences, it sounds like such an exhausting headache. It’s not an easy process anywhere, but the English system seems especially convoluted and stressful!
Great video, as you say its just good to be aware of all this stuff before it comes up! We looked at over 40 flats before buying in London two years ago and noticed that the service rates varied wildly! You can usually ask the estate agent for this info in advance, before you put in an offer. What we noticed was typically, flats where the local council is the freehold are just much more reasonable and transparent compared to private companies, as they don’t make a profit (i think?) so something worth considering for others looking
FYI to your viewers that some of this advice is pretty London-centric - the stamp duty thresholds are pretty high so outside London it’s unusual for a first time buyer to have to pay it - I’ve kicked that can down the road so I’ll only get hit when I sell my house and move somewhere else
This has brought back all the memories of house hunting for our first home 6 years ago - it was so exciting and I've never felt more capable, especially when instructing solicitors and surveyors. I'm now preparing myself mentally to put our house on the market (after renting it out for 2 years while we lived abroad) and then once it's sold, starting hunting for our next one. Dreading it, if I'm honest! It's like, the worst time to be selling and buying... But yes, a very informative video Lucy, it's definitely cemented my feelings about leasehold (I'd never do it, personally, I like owning all of my property). Nice one x
Just to highlight for people, the process of buying in England & Wales is NOT the same in Scotland. There are different rules for accepting offers etc in Scotland. So make sure if you’re looking to buy in one or the other that you find info for that system!
Also no leaseholds in Scotland!
Second all of this!
Leasehold laws changed last week in the Kings Speech. Your rights to extend your lease will be changing to a minimum of 990 years and the attatched fee will be set. So please do not think of extending until the laws change. There are oyher law changes so please check out the update vids online about how leasehold owners will be better off.
mmm property tax in Spain is definitely not 30%! I paid 2.5% tax when i bought my flat last year...The only aspect I think is harder in Spain, compared to the UK, is that you have to save 20% to put down as a deposit, instead of 10%.
Yeah the UK is one of the worst for taxes and extra costs in comparison to most of Europe, so not sure where her info is from 😂
Thanks so much Lucy! Have saved up a 10% deposit for a London flat but worried about interests rates being so high at the moment and I would never have known that I would have to factor in paying those charges ON TOP of it 🙃feels like we're being set up to fail
The interest rates are something else aren’t they! Sending good buying vibes your way xx
thanks lovely xx @@lucymoon
This is super informative, I bought a flat in Manchester 1.5 years ago and it was a quick learning curve for me too. However, the point re service charges and leasehold extensions - I am surprised these points didn’t come up with your solicitor, we definitely received reports stating our approximate service charge per month and the length remaining on the lease once we’d instructed them to do the conveyancing. I wouldn’t expect those things to be a surprise post completion. Hopefully it works out alright for you with the extension!
I was about to write a comment saying the exact same things! Lucy - you and your partner should also look into renewing your lease sooner rather than later as it might prevent you from remortgaging if you’re already close to the 80 year mark, and assuming you’re on a fixed rate could leave you on the bank’s variable rate which vastly increases your mortgage repayments.
Love the video! Last year I bought a similar type of property in toronto (a townhouse attached to a condo where you have to pay maintenance fees and that sort of thing!). It’s definitely so interesting to hear about the similarities and differences between buying in Toronto vs London!! I also keep saying, asking me in five years if it was worth it but am grateful to be on the property ladder 😂❤
The laws are different in Scotland so you are more protected once you agree an offer, you can’t then just accept a higher offer! You do also have to blind bid though
I was thinking that! Also stamp duty is much less of an issue up here and I don’t think leasehold properties exist in Scotland either but I hope someone corrects me if I’m wrong 😅 Buying in England just sounds like a nightmare and the leasehold thing makes it sound like you don’t actually own the property at all 😭
It's worth flagging that the buying process in Scotland is different in many ways & that gazumping is much rarer (though of course still happens).
But the equivalent of stamp duty is even higher 😢
honestly i'd recommend anyone who could afford not to/can find something else not even to buy a flat as they're usually leasehold... i realise this is easier said than done in cities like london but oh my god all the extra fees for flats over houses are awful. leasehold places come with so much additional crap 😭we had a clause in the lease that says the ground rent can increase by a certain percentage after x number of years just because ??? our leaseholder did absolutely nothing all while setting arbitrary restrictions. it's so backward and antiquated and i would avoid it if i could.
(wrote this before i got to the part where you also mentioned this, ooops!)
Oh god! What a mare. Sending good ground rent vibes xx
watching this out of curiosity because i'm also from paris and wow the lease holder situation seems incredibly complicated! i guess all major cities have their homeowning specificities, paris has co pro, nyc has condos/co-ops and london has leases!
I really relate to the part about moving in. We visited the place we bought and thought “yeah that looks fine”, and now that we’re in…OH MY GOD. Wallpaper everywhere, replastering some walls, redoing the bathroom,… I definitely would advise people to have a lump sum for works right after the purchase.
Some unique tips in this one, thanks, and congrats again - living my home-owner dream!
In the Netherlands it's very common in appartementbuildings that each owner owns a part of the building (instead of a leasehold). I think I own 1/64 share of the whole place.
Erfpacht (leasehold) is also really common though. But usually it’s in flats and the council / gemeente owns the property so it’s like a 100 year lease or whatever.
Buying in London seems so different to up north! So interesting x
Oh hey!! Super helpful video. I was wondering if you could say a bit more about not keeping your money in a new challenger bank? I use Monzo for everything so I’m wondering why that isn’t a good idea! Thanks so much in advance xx
It can work, it's just not necessarily easy, as you may need statements stamped/signed by the bank. Also moving money around can make things difficult as you need to show your salary/income coming in, so if you've put money into a savings account then you need to show all the transactions between you getting the money and the account where it ended up.
Hi Lucy - I had to renew my leasehold a few years ago (I did know about it when I bought my flat and factored in the expenses). I had a fantastic solicitor based in Kingston. I would be happy to recommend. She was not the cheapest upfront but she saved me so much money and stress. I paid peanuts in the end. She found quite a few things that the solicitor I got when buying the flat had missed. Her name is Rebecca Law and she works at Arcadia Law firm in Kingston. Also when you get your lease renewed, you need someone to come evaluate the flat for a lease renewal. I cannot recall how much I paid, something like £500 maybe. Anyway, you need to factor this in. Good luck!
I'm about to move into my first home and this so useful thank you!
Congratulations Emily
Just a note to say - the house buying process isn’t the same across the whole of the UK! Scotland has a completely different legal system and it means that buying property is realllllyyyy different. Gazumping doesn’t really exist here as once a seller has accepted an offer the property is taken off the market and isn’t allowed to be shown to other buyers. This does come with its own challenges - our properties are marketed as offers over a certain price and often a closing date is set which means you don’t know what other people might offer so you’re encouraged to put down the highest price you can afford if you really want something, but at least we don’t have nearly as much to worry about once an offer is accepted. In Scotland sellers are also legally required to supply an independent survey and valuation of the property, so buyers don’t have to do that once the buying process is underway and you know that you’ll get a mortgage up to a certain amount!
Also - all properties in Scotland are freehold, so you don’t need to worry about leasehold here. Usually in flats there is a factor company who all of the flat owners pay (like max £50 a month) and that covers things like buildings insurance, upkeep of common areas etc.
Max £50 😂 really depends where in Scotland you live I think! Factors fees can be up to £200 but these are usually always stated in the Home Report so I would encourage everyone to read through those thoroughly 🙌🏻
I work for a large lender. I learnt most things through seeing other experiences!
I'd recommend avoiding leasehold where possible 😬 not uncommon for declined apps because of ridiculous escalating ground rents or onerous service charges.
It is wild to hear that in UK, they don't tell you in advertisement/listing of flat, what the service fees are. In Finland, those are always told in listing.
Also, here we always include to offer a penalty fee if either party breaks the contract. In law, it is told, how much is the maximum amount. Also, typically in offer you set the (weekly or monthly) penalty for the situation where flat is not free on agreed time.
In Finland, typically, building maintenance covered by insurance is covered only after the renovation. Hence, there should be some money laying in building maintenance account waiting if any emergency happens.
Just to comment from an accountancy background who has worked on accounts for management companies. The “reserve” is usually put aside for major works, such as structural works, fire door and window replacements and roof repairs which the company know are going to cost them a lot of money in the future. This is usually detailed in your lease (although it may be somewhat difficult to read) but this usually outlines what the freeholder is deemed to pay for and what the lease holder should be paying for. They may have certain clauses saying certain percentages are to be put aside for reserves but this is dependent on which property you buy.
I also agree with other comments that you can definitely ask the estate agent what the fees are and they will usually be able to find the answer for you. Make sure when you’re buying a flat that your solicitor reads through the lease and makes sure everything is reasonable as there is often clauses which are totally ridiculous that will put off future buyers of the property.
Here in Finland, maintenance fees for apartment buildings are always included but they are also always listed in the listing, so it's totally transparent and no one gets blindsided.
Wow, a mortgage for 35 years? :O That seems like an eternity, and this is coming from me, who is 39 yo. This freehold thing in the UK is just wild! I am really astonished, and about all the other extra fees, this is crazy.
Honestly it's so so stressful that you don't actually have any legal ownership until the exchange of contracts! Ours happened the day we moved in so we were outside with our stuff in a lorry just left the house we sold just hoping we were actually moving in! Xx
As someone who bought around the same time as you (but a condo in the U.S.) this makes me so so grateful for the professional's I worked with - my buyer's agent (a real estate agent who specializes in helping buyers) who helped me negotiate for a home inspection (so an outside person who did all the window/plug/faucet/appliance checking) got info on my condo fees (which sound similar to your leashold fees but you know - different country) and expected upcoming condo costs and generally just negotiated on my behalf really well and every stage. and my mortgage broker, who walked me through some of what you said regarding whether it was worth it to put more than 10% down and what different mortgages were available to me.
I guess that's my advice to people considering first time homeownership - taking the time to find really good people to work with is worth it
To buy in the UK sounds so stressful. The chain, leasehold and guzompting (?) is not a thing. If your offer gets accepted in norway you plan a day to exchange (usually within a few months) and then it's yours from that day.
I bought my leasehold flat a little while ago but the lease is owned by the local council so they can't charge us loads for anything and the service fee is £12 a year! You also should be able to ask for the past 3 years maintenance fees as well 👍 You can also extend the lease at any time for a very reasonable rate, I think when I enquired it was about £50 per years extension. Be cautious who owns your lease!
Can you pay off your mortgage early? I never really understand when people tell me theres fees to pay off early, but if you sell your house do you have to pay all those fees anyway to completely pay off the mortgage??
You can but you might have to pay a fee, e.g. if you take out a mortgage for 3 years but want to pay it off before the 3 years you have to pay a fee.
The property maintainable fees, service charge and ground rent should have come up in your conveyancing. Almost certainly it you have a look at the fat stack of paper they gave you it’ll be in there
We knew it was coming once we were in the process to buy, but there was no way to know before we put our offer in and committed to buy!
@@lucymoon this is odd, we asked about the fees when viewing the places for the first time and the estate agent got back to us every time. You can definitely ask before putting in an offer.
Property management is highly regulated with accounts being audited every year. If you have any questions happy to help. I work in property management with leasehold and commercials.
Hi Lucy. Where can I find the "10 % better" series? That sounds like just the thing I need right, having just moved into my first flat. It's chaos over here.
Great video. I’ve owned now for 8 years by myself and hands down the best thing I did (although it was hard and I had to cut back massively to afford it at first).
Some questions and other points from speaking with friends (maybe there could be a part 2 video 😊):
How long have you fixed your mortgage? I bought just after the Brexit vote and was worried about interest and inflation so I fixed for 5 years. I’m now in another 5 year fix and thank goodness because the interest rates are high at the moment. I know some people are on variable but I can’t handle not knowing what my mortgage payment is every month haha.
Do you have any stretch in your budget if interest rates continue to rise? I’ve worked out I can weather up to 10% interest on my mortgage without being worried about missing payments, I have friends who borrowed to the max of their budget and are now sweating as their fixes are ending.
Do you find the general cost to be more than renting? I have friends who rent who think owning is cheaper, but I’m responsible for every item in this house. If it breaks, I need to repair or replace it. I’ve just had a quote for £3k for a basic boiler, you’d never pay that renting.
Did you use a LISA or a gov scheme? I used the original help to buy saving scheme which meant I got a 20% boost on everything I saved which ended up covering my legal fees and SDLT (the FTB scheme didn’t exist when I bought - it was introduced like 3 months after 😅)
When I moved in I bought loads of new things that didn’t all ‘fit’ with the style of house I eventually ended up in, I’d recommend waiting and purchasing things as you go (second hand stores have been brilliant). Did you already have a lot of furniture?
Finally, on gazumping, I made my offer conditional on the property being removed from listing and then not showing anyone else around. I also had it built into my contract that they would cover costs if the seller pulled out for a higher offer. It’s a buyers market at the moment so you have more leverage (houses are taking longer to sell than back in the late 2010’s).
I bought a leasehold property but was fortunate enough to buy the share of the Freehold so I don't have to pay any service charges. I would suggest any first time buyers who want to live in London to look out side at opportunities so you aren't paying wasted fees on service charges. Look for share of freehold properties if you can't afford freehold. If you apply for remote working jobs you avoid the extortionate commuting costs.
We got our place partly because we were enthuastic. We had to go to best and final offers and I think because we expressed interest in certain aspects of the property it worked out in favour. But also we are from the north of England so not similar to London. Also we didn't see the property with an estate agent, it was us and the Owners only
That’s really good to know, I hope this helps some people! And congrats on your property!
Defo didn't read the thumbnail as "I silly win billy the awards"
Hahahaha this made my morning
Re: service charge - you can request information about what the charge was for the last year. Ours was around 2.5k but then the first year we were in the building, it went up to about 3k. It changes every year. It's super stressful :(
god the leaseholder thing sounds like an HOA but worse
Thank you so much!! In the Netherlands you can see the service fees before you buy and if the buyer accepts a higher offer after you’ve signed, they have to pay you 30% of the price. And if you cancel then you have to pay the seller 30% of the price
They don't tell you what the monthly maintenance fees are before you make an offer??? I own my apartment in NYC and those monthly maintenance fees are in the real estate listings! And I'm curious, why are you saying you are a leaseholder? Leasing is for renting, and you bought your place! Just curious!
Because like most flats/apartments in England you can't actually own the flat. You buy a lease which is generally at least 70 years and may be hundreds of years, and you can sell the lease on when you move out. But you are still renting and will pay a usually small amount of rent to the landlord as well as the maintenance charges. And the maintenance charges aren't necessarily clear up front - depending what the lease says they can be anything, and often they are worked out after the landlord has incurred whatever costs they want. It's not a great system.
@@MichaelL8 Yeah it definitely doesn't sound great. In co-ops in NYC, it's kind of the same but we phrase it differently and there's nothing that we need to buy again to resell. If you live in a co-op, you own shares of the building, not your actual apartment - kind of like owning shares in a company.
@@SundayMorning6amBLBC That sounds more like "share of freehold" which also exists in England. In that case you still have the lease on your bit, but you also either directly own part of the freehold for the whole building, or sometimes there is a company that owns the freehold and you hold shares in that company. Share of freehold isn't perfect, but at least you have collective control rather than the freeholder being a landlord looking to make money.
You definitely can, almost all listings have the feed included and if they don’t you are able to ask the agent for it. Seems like they were very keen to buy the flat and didn’t look into it beforehand
Can you not just log onto your bank account website, where you usually look at your account, and print off your monthly statements from there? I'm in the US and that's what I did, just downloaded the last 3 months bank statements off my bank's website as PDFs and sent those along to the mortgage company.
They need to be stamped / approved by the banks for getting a mortgage over here!
It actually depends on the lender - some need stamped, others accept pdfs etc. I didn't have to get stamped documents for mine (just bought in Aug this year).
Oh god!! You can still lose a place in the UK even if you've put money down on it!!?? Woah. Here in France when we put an offer on something, we have to sign this "intent to buy" like form, and the law with that form says that the owner cannot sell to anyone else unless the buyer drops out for a serious reason, is denied a loan, or the owner has decided not to sell for whatever reason, a person wanting to buy at a higher price is not a legit reason to break this intent to buy contract. Oh but I just remembered, the estate agencies may still have a place listed on their website but the listing will have "sous compromis" listed with it meaning that the property is under contract to be bought but the deed hasn't been signed yet, but just because it's still listed doesn't mean it's available
Not exactly, no - we don't 'put money down' on a property - we make an offer, the offer is accepted, then at 'exchange' (when you exchange contracts) thats when money is released. You can have an offer accepted, then someone else can make a better offer (called Gazumping) and you lose the house - but no money has been lost at this point. Once you've exchanged, there's no going back and it's legally binding.
Not going to lie I am absolutely shocked at the level of ignorance - it's fine not to know all of these things at first going into it but I feel they are absolute basics that any first time buyer with any sense of due diligence would have found out about on day 1 of flat buying - not knowing about how much the service charge is until after completing ? not knowing about the length of the lease and how it impacts lending and renewing the lease ? a potential recipe for catastrophe as it turns out
Damn the UK is wild
💛
you havent put AD in the title or thumbnail...
Hi there! I have followed the ASA guidelines, which say, “If the video is largely editorial but includes a section that is advertising, or only some of the products featured are affiliate-linked products, it should be clear immediately before or at the time the advertising starts/the affiliate linked products are featured - either by way of a clear verbal explanation or prominent on-screen text to make clear which parts of the content are advertising.” To make this clear, I’ve included text on screen, a popup on the video itself and AD in the description of the video. I hope this helps to clarify things!
Poker face 100%
Videos like these are so annoying considering most of us will never be in the position to ever buy
Are you single
Here in Finland, maintenance fees for apartment buildings are always included but they are also always listed in the listing, so it's totally transparent and no one gets blindsided.