10 Minute ReadWhen I moved to London in 2015, I started renting a flat by the Olympic Village in east London and the moment I realised that over time I had spent £30,000 on rent I decided that I HAVE to make a change and look at buying my own flat.
But it’s not that easy, the average property price in London is around £666,000.
In this video I’m going to explain my story of how I bought a 2 bed £600k flat at age 25 that costs me the equivalent of £400 a month, I’ll include all the numbers and a breakdown of the figures to show you how it’s possible for the average person.
If you’re only here for the numbers and to save you going through the whole video – I bought the flat for £567,000 using a £40k deposit on a 40% shared ownership scheme then rent out the spare room which helps cover service charges and rent that come with being a shared owner. If you want to stick around I’ll give you a deep dive into the all the numbers in more detail.
Why Did I Buy?
I was renting in London for 2.5 years and spent over £30k on rent then decided to make a change
I was looking in the local area, I invested all my money into bitcoin and turned $40k into $100k, then lost it all. I then put rest of money in tech stocks and built a pot of cash up to £40k then used that to buy a 40% share of the 2 bed flat.
There was an issue, the floorplan as I bought off-plan showed 2 balconies, when I finally got to view the flat, there was only one balcony so had a delay in the conveyancing process whilst my solicitors were pushing for a mis-sale case. I got about £3k back as the bank had thankfully valued the property correctly so was given a good will gesture.
Moved in January 2019 and moved lodgers in April 2019.
- £567,000 purchase price
- 40% share = £227,000
- £40,000 deposit / £187,000 mortgage on a 0.1% interest staff mortgage
Getting a shared ownership flat and renting out the spare room means I have a 2 bed flat in London, paying down capital on the mortgage, little bit of capital appreciation mixed in there as well although London isn’t doing so well over the past 2 years which is a shame as I just missed the boom that happened around 2015.
I don’t want to buy the flat outright, there are huge plans to build a stadium next door which might improve property prices but the money that I’d need to staircase the flat to 100% ownership would cost over £100,000 plus about £18k in stamp duty – that money could be better used in property investing up north where I could then leverage it with more mortgages on more properties to build a business.
I’d love to take the equity in the current property and use that to buy a cheaper residential home outside of London in the future and refurb a property to live in whilst benefitting from the tax free gains that also brings with the private residence relief the government offer when refurbishing your own home.
For me – I’ve realised in 2020 that creating multiple streams of income is the best way to add financial security, jobs aren’t secure as we all think so by having a safety net, if you lost your job, or became ill then you’d have some kind of support to keep you going with small side hustles and projects – and for me, property is that thing. Although I’d love to grow it into a full time business in the future.
