Theatre director reveals how he beat soaring London house prices – by buying £317k flat with his brother
Would you live with your brother or sister if it meant owning your own home?
A THEATRE director has revealed how he beat soaring London house prices to buy a flat with his brother.
Simon Kane, 27, from London, thought that owning his own home in the capital city would only ever be a pipe dream.
And it's no wonder when single first-time buyers now face saving for over a decade for the deposit for their own home.
But rather than taking a solo flight from the nest, Simon brought his brother Andrew, 31, along with him.
This week in our My First Home series, we speak to Simon about how he managed to save for his flat and what it's really like living with your brother.
Where do you live and how much did it cost you?
We moved into our two-bed flat in a new development in Barking, London in June this year.
We bought it for £317,000 and put down a £65,000 deposit - so 20 per cent.
Andrew put down more than me though because he's been saving for longer so we split it 70/30.
When did you decide that you were going to buy a house together?
I’d been living with my partner, but when we split in 2015 I couldn’t afford to rent somewhere on my own so I moved back in with my parents.
Obviously, I did pay them rent, but it was less than what I would have been paying a landlord, so I was able to put some money aside.
My original plan was to stay there until I got back on my feet because it is quite restrictive being in your mid-twenties and living with your parents in zone 5 in London.
But after chatting to my brother, we realised it would be better trying to own our own place so we weren’t lining the pockets of someone else.
I also know what it's like living with Andrew because we grew up together and had both been living together at home so it wasn't a risk.
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How did you save for a deposit?
I'm a freelance theatre director so how much I earn can fluctuate. Some months it could be more than £1,000, others it can be nothing. It just depends, so I put aside what I could.
Andrew has a more consistent income. He is employed as a broadcast graphics producer and has been working since he left school at 17.
Over the past 12 years, he has put money aside in a savings account.
This, combined with my savings, meant that between the two of us we were just about able to scrape together enough for a deposit.
Have you thought about what will happen when one of you wants to move out?
We don't see it as a problem as we know that we won't live together forever.
Depending on the situation, one of us will buy the other one out and have the two-bed to ourself or get a lodger or sell.
Why did you choose Barking?
Barking as an area is currently in the process of being regenerated, so you can get a lot for your money here – but it's so well connected and there are still lots of things to do.
When we were looking it seemed like the perfect area.
Our flat is also 10 minutes from the station, which is important for me as I work in different locations across London.
It just turned out that it was the most affordable and convenient place.
Did you get any help with buying the property?
We looked at a few properties, but after seeing the show home for this development we could really see ourselves living here.
There was also a great scheme for first-time buyers.
The developers, Weston Homes, enable first-time buyers to put down a £500 protected reservation fee on the plot before it was built.
That meant that if there are any problems with getting the mortgage signed off later on and we'd no longer be able to buy the flat, we'd get the fee back.
Was it easy getting a mortgage?
Getting a mortgage for us was a huge concern because of me being self-employed, and we were never going to be eligible based on Andrew’s income alone.
Lots of mortgage providers don’t really touch people who are self-employed unless they are earning loads.
Our mortgage broker, London & Country, was brilliant at talking us through everything but even though it'd shown us what we were eligible for - and which lenders accepted self-employed mortgage applicants – we still didn’t know what would happen when we filled in the paperwork.
We originally applied for a mortgage with TSB as it offered the best deal.
At first, it seemed like the perfect fit for us but when we had to fill in the paperwork – we hit some problems.
The problem was that when we applied, the majority of my income was from self-employed work.
But a few months before, I had taken on some additional work to save a bit of extra money and for this I was on a traditional contract.
When I attempted to show my income, TSB said it would only take my self-employed earnings or my employed earnings into account but not both.
Only looking at one income source meant that our application was below the threshold.
MY FIRST HOME
We were actually more than able to meet the repayments so it was a bit ridiculous.
Fortunately our mortgage broker was amazing and were on it straight away and they found us a great deal with NatWest.
So now that you’ve moved, how have you settled in?
We feel like the place really is ours because we were able to choose the design, the layout, the colour schemes and the units.
We've still got some way to go with the interiors and eventually we are thinking of adding a bit of bold colour, but we want to settle in first.
Right now though, it's just amazing to have a place where we can do what we want and aren’t being restricted. It's just ours - and that is a fantastic feeling.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers own their own home.
Help to Buy Isa - It's a tax-free savings account where for every £200 you save, the government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move.
Help to Buy equity loan - The government will lend you up to 20 per cent of the home's value - or 40 per cent in London - after you've put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa - This is another government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the government will add 25 per cent on top.
Shared ownership - Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you're restricted to specific ones.
"First dibs" in London - London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative - A government scheme that will see 200,000 new-build homes in England sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest on the website.
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