Woman bought two-bed flat worth £170k after a break-up – how to make buying on your own work
Amélie Arras, 26, who used a shared equity scheme to buy a two-bed flat in Chichester after she split up with her boyfriend
WHEN young people make it on to the property ladder it's usually as part of a couple.
But what if you don't have a significant other?
Since we started this series our inbox has been full of emails from single people struggling to get on the housing ladder.
With the average first-time buyer needing £33,000 and the average house price hitting £207,693 it might seem like an impossible feat for those going alone.
Government schemes like Shared Ownership make it a bit easier, but you co-own the property with the housing association and must pay rent on the bit that's not yours.
You can buy anything from 25 per cent to 75 percent of the property, and you can increase the amount you own over time.
But some developers also offer similar private, shared equity schemes where they allow you to buy only a portion of the home to help you get on the property ladder.
And whilst it means that they will own a stake in your home, there won't be any loan repayments.
This week in the My First Home series, we caught up with Amélie Arras, 26, who used a shared equity scheme to buy a two-bed flat for £168,999 in Chichester after she split up with her boyfriend.
Who said singletons can't go it alone, eh?
When did you buy your home and how much did you pay?
Prior to buying my own home, I lived in a rental flat with my boyfriend. When we split up in November 2017, I decided it was time to buy my own place.
I’d viewed a couple of houses in my price-range beforehand and they all needed so much work.
So, when I saw this flat – which is just three years old – I was delighted!
Unfortunately, the vendors saw how much I loved the property, so when I went to make an offer, they were only prepared to settle for the full asking price of £168,999.
Because the flat already came with a shared equity arrangement, it meant that that value was for only 75 per cent of the flat, so the developers would still own 25 per cent.
I made an offer on the flat in December 2017 and the transaction completed in March 2018.
What's shared equity and how's it different to shared ownership?
The previous owner purchased the property from a housing company called Landspeed, who offer their own shared equity scheme.
When I purchased the flat, they agreed to continue the arrangement with me.
The shared equity scheme is different from a shared ownership because although I have just 75 per cent of the equity, I don’t have to pay rent on the other 25 per cent.
I don't have to get their permission if I want to modify the interior of the flat either and Landspeed can't force me to sell the property.
I can also buy the remaining 25 per cent (or part of it) if I want to.
If I do this, I’ll have to pay the market rate for the percentage I’m buying, so will need to pay for a professional valuation of the property.
If I don’t purchase the additional 25 per cent then I simply pay Landspeed their equity when I come to sell.
Having shared equity doesn't worry me. At the end of the day I paid 75 per cent of the total value, so will be getting 75 per cent when I sell.
How big is your flat and do you live on your own?
The flat has two bedrooms and a living space with kitchen and dining area.
It’s a great size for me, especially as I am used to house-sharing and only having a room to myself.
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At the moment I live on my own. When I first moved in, it took a little bit of getting used to as I have always lived with other people – either my family, or as part of a house-share.
But I'm hoping to get a tenant in to rent the other room, which will be helpful financially.
How did you afford to buy a home?
I moved from France to England in 2011 to improve my English by working in a café.
I loved the life here, so decided to complete my studies in the UK at Chichester University.
I knew I wanted to own my own home eventually, so I continued to work at the cafe while I was at university and save as much money as I could.
Then when I took up my role in marketing in 2014, I was able to save more. At one point, I was putting away £1,000 a month.
When I was ready to buy, I had £20,000 saved.
The downside was during this time I didn’t have much of a social life, both because of the hours I was working and the money I wanted to save.
My social life was working at the café and speaking with staff and customers!
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What size deposit did you pay and what mortgage did you get?
I took out a mortgage with NatWest for £154,000 and put down a deposit of £15,000 towards the purchase price.
When I tried to look at different mortgage deals, I found it very complicated.
So I engaged the services of a mortgage advisor, who helped me to find the right mortgage for me. This service cost me £395.
My first-time buyer mortgage had reduced fees and I was given £500 cashback on completion.
I am paying back the mortgage over a 40-year term, and my monthly payment is just £490 – over £100 less than I would pay to rent a single room in Chichester.
How did you find the property?
I searched on Rightmove, as well as speaking with local estate agents about what I was looking for.
I received a lot of adverts and went to visit a few properties. As soon as I walked into this flat, I knew it was right for me.
How did you afford the furniture?
I haven’t yet fully furnished the flat, as I like to have furniture that is good quality – either brand new or antique.
So far, I have my own bed and wardrobe, a table and chairs and a sofa. I’ve yet to furnish the second bedroom, which is one of the reasons why I haven't yet advertised for a tenant!
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a grim 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 - 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 your 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 to be 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 .
How did you feel when you completed?
I found the process of applying for and committing to a mortgage very stressful. But when it all went through I was elated and excited to move into my new property.
What was the hardest part about buying a house?
For me, the hardest part of buying a house was understanding the legal process. The level of paperwork, form filling and administration made it a stressful time!
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I’ve even received more paperwork recently - a box of deeds from my solicitor, containing information on the rights and restrictions on the property. It’s overwhelming.
What’s the area like?
The location of the flat is perfect! I work in Chichester, and the flat is right next to the train station where I can take a train to the town in 9 minutes.
Then it’s just five minutes' walk to work. It’s also just 5-10 minutes’ walk from the beach. To me, it looks just like Brittany, where my mum grew up so, it’s just ideal.
When do you think you’ll move again?
My mortgage is on a fixed rate for 5 years, after which I think I might try to move again.
By that point, I hope to have moved forward in my career and be earning more money.
I also hope to be ready to have a family, so I think that will be the right time for me to buy something else.
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