How A 25-Year-Old Civil Servant Bought Her £230,000 Greater London Flat

First up: A 25-year-old civil servant on a £50,000 salary, who used the mortgage guarantee scheme. The mortgage guarantee scheme has helped to increase the number of 95% loan-to-value (LTV) mortgages by supporting lenders through a government backed guarantee, meaning you only need to save for a 5% deposit.

Location: Greater London, Surrey

The home: A one-bed flat with a kitchen and a separate living space. It's part of a nine-year-old development that’s a mixture of flats and houses.

The sellers currently own 75% through shared ownership and through this sale they're able to staircase up to 100% to give me 100%. Once I’ve bought the flat, it will be managed by a property management company which is technically the freeholder, so if I ever want to extend the lease, I’ll do it through them. 

When I bought: My offer was accepted on 29th May and I’m due to complete by the end of September 2021.

What I bought it for: £230,000

How I bought it: I put down a £17,000 deposit, which is almost 7.5% of the property’s value. £3,000 of this was a gift from my parents to put towards my deposit and legal fees. I discussed my options with a mortgage broker and the mortgage guarantee scheme means I won’t need to stretch myself too much in terms of monthly costs. It also means I own the entire property instead of being required to pay back the government X percentage when I sell.

Lender, survey and conveyancing fees: Conveyancing fees are going to be £1,480 and I've not had to pay for anything else. [In my case], my lender did the survey and my mortgage broker doesn't take a fee from me, he'll take it from the lender. [Ed. note: This can vary depending on your lender and mortgage broker.]

Stamp duty: I don’t need to pay stamp duty as I’m a first-time buyer and the purchase price is under £300,000. My completion deadline is 30th September so my sellers don't have to pay stamp duty. 

Monthly mortgage payment: I’m borrowing £213,000 and my monthly mortgage repayments will be £898. 

Ground rent and/or service charge: Service charge will be £108 a month.

Why I wanted to buy: Owning a home has always been a goal for me, to give myself a security net. My mum and I were homeless for several weeks back in 2005 when my dad stopped paying the mortgage on our home for a year. Since then she’s never wanted me to be in that position so I lived at home for three years after graduating from university to allow me to save the £17,000 for my deposit. (Until April I was on £32,000 and saving £700-800 a month; since April I’ve been able to save £1,400 each month.)

I started reading about the mortgage guarantee scheme and some friends explained it to me. I decided to speak to a mortgage broker about my options. He outlined everything and understood that I didn't want to be stretching myself too much monthly. Based on my salary and potential outgoings, he worked out that I could have a mortgage and bills while still being comfortable financially and able to enjoy myself. Then he gave me my agreement in principle and told me to start looking at properties worth up to £250,000. If I made an offer and it was accepted, we’d speak about the next steps.

The process: I started looking for a place when I got my promotion at the end of April this year and my salary increased. I could save a lot more and I realised my borrowing ability was significantly higher. After speaking to a mortgage broker, we landed on the mortgage guarantee scheme, which started in April this year.

I opted for a location that I know well and could afford. If I went a little bit further into London, even to zone five or six, I could only afford studio apartments because the prices are high. I also wanted to be close to my parents – I'm very close to my mum – so this area made sense.

There were certain things I wanted from my one-bed property. This sounds silly but I wanted a gas cooker because it’s difficult to make Indian food on an electric cooker, which ruled out a lot of flats. I also wanted a separate kitchen and living room space – a lot of flats, both old and new build, have them combined. There was a penthouse flat in the same building as mine, which was slightly bigger, but I didn’t go for it because there wasn't that clear separation. 

I looked at five or six properties in total, including mine. It was around the time that everyone was thinking the stamp duty holiday was about to end so when properties came onto the market you'd have to move quickly. My flat came on the market the day that I saw it online, on a Thursday. I'd seen a flat in the same development a couple of days earlier online and when I phoned up they said it was already gone, so when this one came up, I knew I needed to act fast. I viewed it on the Saturday, went back with both my parents on the Monday and put an offer in before viewing it with another family member the following day.

I was told the sellers weren’t going to accept anything below the asking price so I panicked and went in with the asking price without consulting anyone. About a week later I realised I’d eventually have to extend the lease, which would cost me about £5,000, so I amended my offer to £5,000 under the asking price and they accepted quickly.

My mortgage broker then walked me through the entire mortgage process from start to finish, answering all my questions and alleviating my worries and insecurities. He also sourced my solicitor for me and helped me weigh up the pros and cons of the mortgage guarantee scheme. I was really fortunate to have him and I’d recommend other first-time buyers find someone like him because it meant I didn't have to worry too much.

Getting my mortgage offer was one of my highlights of the whole process as it confirmed that I am able to buy a property at this age. I wish I’d known more about what happens once you get the mortgage offer, as I soon started to feel a bit unsure about what was going on. I felt in the dark for about six weeks, touching base with my solicitor when I needed to but also not knowing what was happening next.

Helpfully, my solicitor uses an online portal that details the next steps and lets you know if there's something you need to do. There are now just three things left on my checklist: returning the contract, exchanging and completing – the three big things. I also leaned on people who I knew had bought recently to make sure I wasn’t missing anything. There was definitely a moment when I thought, I've not heard anything for a really long time. I need to check in but I'm not sure what I'm checking in about. We should have been taught about this process at school.

It feels nerve-wracking almost being a homeowner. Because I almost lost the property a few times, having to go through so many different lenders, when people ask if I’m excited, I say: "I'll be excited when I have the keys." Having responsibilities and a mortgage to pay also means I can't just quit my job and go travelling or go back to uni, which is also quite scary. People don't really talk about that side as much.

My best piece of advice: Talk to a mortgage broker. I completely appreciate and am aware of my privilege of being able to live at home and save – I've got friends who haven't been able to do that – so speaking to someone who's independent and who knows what they're talking about can help you work out what’s available to you.

The best piece of advice I was given by my mortgage broker, which sounds obvious, is if your budget is £250,000 don’t think about looking at anything above that because it will just cause disappointment.

Once I’m in: I’m not moving in until all the redecorating is done. It just needs a bit of TLC – mostly painting and a few things need fixing. I’m going for a very typical millennial colour scheme: deep pink and dark green, and a '70s vibe in the living room. My family has a really lovely – they won’t mind me saying – tacky gold and marble coffee table which they’ve been keeping in the garage for me because I said I wanted it years ago, so that's going to have pride of place in the living room.

Head to Own Your Home for more information on the government’s home ownership schemes.