We have lived in East London since 2009 and after the Olympic Games, we thought that settling in London was a good idea. It took us a lot of research and money management for finally buying a house around the same area. However, after this long process and a lot of stress, we managed to buy the best house for us within the best location in East London.
Our research started after the Olympic and the Paralympic Games finished, June 2012, as I found out that the locations where the temporary stadiums were new neighbourhoods will be built. These will be self-contained complex with many apartments, new school, new shops, everything within the Olympic Park. Making this the ideal location to buy as it would feel like living in the country side but within underground distance to central London.
The first flats available in that complex were within the Olympic village, where the athletes were living during the games. We went to the sales office and saw the samples flats for one, two, three and four bedrooms. We were very excited about the possibility of buying the house there, however, they said that due to our joined salaries we did not qualify for shared ownership. We left the sales suite with more questions than answers, as we did not know what shared ownership was, the difference between leasehold and freehold. Therefore, we needed a lot of research before we could even imagine buying a house.
In April 2014, we attended the London Home Show where we gathered a lot of information and found out all the schemes that were available to buy a house in London, like the help that the UK government gives to first time buyers.
With this in mind, we decided that the best schemes for us was the Help to Buy. In this scheme the government helps you by giving the buyers a loan for some part of the house with very little interest rate, which allows the first-time buyers to obtain a smaller mortgage. This scheme allows London buyers to aim for a property with a sale value of up to £600,000 and a 5% deposit. Therefore, the next task will be to start saving for a deposit of up to £30,000; so we started saving towards this.
After, this research we knew that the best way to buy our property was through Help to Buy, now the next step was to find the builders who worked with this scheme. This process was long and tedious, as I sent emails to everyone in the list of contractors that I got and only a few responded. However, the answer was “we do help to buy but currently we do not have new developments”.
I also took notes of the developments that were happening in the area that we liked. However, the problem is that by the time that you could see the building construction, the property has been sold out. However, I narrowed down the list of builders that worked in the scheme for future reference and started my deposit fund where I saved around £100 per month.
In 2016, we found out about the help to buy ISA (saving account) where the government will contribute with additional funds when used towards the deposit of your house. Therefore, we both opened the help to buy ISA and started contributing the maximum of £200 per month towards the deposit. We very getting very serious about buying a house.
Around May, we knew what scheme we needed to work with to buy the property, the only thing remaining was to work out the logistics of actually buying the house. Therefore, we decided to contact the sales suite of a new property. We attended the open house for at a new development complex near Wembley and since we needed to know how the system worked, we decided to tell them that we had the entire deposit in order to sound like serious buyers.
We arrived to the sales suite, we sat down and waited for a sales representative, and we told them our lie that we had the entire deposit. After us, another couple arrived and they told that they came to look around. We went to the showroom flat together, however, my husband noticed that the treatment was different as the sales representative was answering all our questions and ignoring the other couple.
In any case, we saw the showroom flats and then returned to the sales suite to ask a lot more questions. The majority of our questions were around timeframes; when we should pay the reservation fee, when the deposit, when to get a mortgage and so on. After 30 minutes of them answering our questions and us refusing to make the reservation payment, we realised that we should only attend a sales suite once we have the deposit and we are interested in buying within the property that they are attending to see. There is so much information online about the properties and you should only go when you are serious about buying, as the process there is very fast.
Therefore, we concluded that the next time we attended the sales suite of any construction site we needed to have the full deposit and the reservation fee. However, I decided to subscribe to all of these construction newsletters to keep with the developments.
In 2017, I continued receiving emails about the newest developments and decided that we should start considering our options and thinking that we may have the entire deposit by the end of the year.
Around November, we thought that we had enough money to cover the deposit and we started our search. We did an extensive research online and since we did not want to move from East London, we ended with various options. However, we needed to consider all our requirements like the property was within our price bracket, does it take help to buy and the most important is transportation links to central London and the university.
After a month of research, we found an amazing property within 15 minutes of our previous address, with three big bedrooms ideally for our first home office, and to start hosting dinner parties that I have not been able to do before.
On 4th December 2017, we had almost ¾ of the plan deposit and enough for the reservation fee. Therefore, we were prepared to carry on with the reservation, if we like the space and property. We arrived to the sales suite and saw the complex model and the location, everything was looking very good and we were getting excited. I noticed that when given the papers of which plots were still available, the list did not match the one on internet on either location or price. For our surprise, the available flats were better than the ones on internet and cheaper, which we loved it. At the end of the visit, we paid for the reservation and then the tedious paperwork began.
We got a reservation agreement where we commit that within 28 days we will have an AIP (agreement in principal, produced by a financial advisor) and a solicitor to give instructions about the contract. Therefore, we needed to find a financial advisor and a solicitor. However, the developer had some suggestions in both cases.
The next week, I sent emails to every company in the list in order to get quotations for their services. After serious analysing every quotation, we chose one solicitor and one financial advisor, and we started the buying process.
The financial advisor was the one that helped us found the best mortgage, and when we compared this value with the value of our own research, indeed the financial advisor offer was a better deal. Therefore, we left all the search to the financial advisor and just focus on dealing the mounts of paperwork that we needed to sign, witnessed and sent.
The best advice for dealing with the amount of information and papers generated by this process is creating a binder and contact information sheet so that all the telephones of every person involved are handing and easy to find, as the amount of questions that you have during the process occurred every week.
The solicitor that we chose had a lot of experience dealing with our developer and therefore was the best way forward, and it does help that is was the cheaper quotation.
Once we had our team complete, we were ready to start. Our financial advisor found us an amazing mortgage deal and we signed all the necessary paper. The lawyer received the instructions to proceed from us and contacted the developer, and we received a lot of papers to sign and witness. Therefore, we treated one of my husband’s best friend’s family for breakfast and to help us with the signature.
This process is not difficult; however, it requires a lot of patience. If you considered that we paid the reservation fee on 4th December 2017, we received the mortgage deal on 16th December 2017, the lawyer sent their papers on 23rd January 2018, and considering that we needed to finalise the deposit process by 6th February 2018. We thought that it was very tight timeframe, which added a lot of stress to this process.
The exchange of contract happened without a problem and the deadline was met. However, it happened that the bank before authorising the mortgage carried out their own valuation for the property. Unfortunately, this valuation did not match the value that the developer gave. Therefore, the price was dropped according to the valuation and saved us a lot of money. Unfortunately, with this reduction this meant that we needed to pay the stamp duty, new mortgage deal was made, and re-signed all the documents. This took another month to the process and this was completed end of February. By that time, we had already paid for the upgrades to our flat and we were still stress about the process.
Now the next step was to wait, and wait, and wait, as we were not getting any updates and our mortgage offer expired 10th July 2018. Although, the developer assured us that the completion date of 29th June 2018 will be met, we were nervous about the date as everything depended on the fulfilment of this date.
Our involvement with the financial advisor concluded when they delivered the Authority to Proceed with the new value of the property by the beginning of March 2018. However, our involvement with the lawyer concluded when we settled our account and got the keys of the property. We got our keys on 27th June 2018, two days before the estimation date of completion, and after all the stress we finally moved to our property it on 5th July 2018.
The process of buying can be straight forward, just need to be prepared:
Before reserving the plot:
Have the reservation fee and the full deposit.
After reserving the plot:
Get a financial advisor:
There are some companies that give free advice, as they have access to preferable rates in mortgages.
Make sure that the expired date of the mortgage is at least two weeks after the estimation delivery date.
Get a solicitor:
Make sure that they are in the panel of the financial institution where you are getting your mortgage.
Find a solicitor within your budget.
During the process:
Be in constant communication with your lawyer as they are with you the entire process, however, be patient as they are not very prompt with the communication.
Be patient as this process is a marathon, and it takes around seven to eight months to conclude, especially if you buy a new property during the construction process.
Visit the property constantly, this will help you figure out if the construction is within the timeframe, and you will start dreaming about being in your own house.
The best advice that I could give is enjoy the process, as buying your first house only happens once.
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