We talk to a first-time buyer who is renting out her first home in Nottingham while she rents in London (where she couldn’t afford to buy) about the emotional and financial costs.
Welcome to Home Truths, the tell-all series where homeowners and renters spill the beans on what really goes on behind the scenes when buying, moving or renting a property.
Moving story at a glance:
Date bought: July 2020
Home cost: £150,000
Deposit paid: £37,500
Renovation costs: £0
Mortgage payments: £200 a month
Rent payments received: £500 a month
What’s the home you bought like?
It’s a red brick new-build one-bedroom flat in Nottingham. It’s on the top of a hill and it has a really great view that obviously I don’t get to enjoy.
I live in London now and am not planning to move back to Nottingham (where I’m from) any time soon. But if I did, I could totally see myself living there.
Why did you buy it?
My sister actually owned the flat before me. She had bought it for £125,000 and I bought it for £150,000 so I think she might have cut me a bit of a deal.
I’d wanted to get on the property ladder for about three years, and looked into Help to Buy and Shared Ownership, but nothing had really worked out. I am single and even with a good London salary it didn’t seem possible for me to buy somewhere I could actually live in.
When my sister bought a new home with her boyfriend she kept her flat in Nottingham and rented it out, but within three years she decided to sell so she could get a rebate on stamp duty. It was win-win because I got on the property ladder and she got some money back.
Most of the deposit money wasn’t mine. I had less than £10,000 in savings and most of it went on solicitors and other fees. But, because I’d applied for a mortgage in January and the flat purchase didn’t go through until July, I’d had time during lockdown to save up. There was nothing better to do with the money during lockdown.
The £30,000 was from my nana and grandad. They helped me out because it was a family thing, and I guess it’s kind of an inheritance.
Was it easy getting a mortgage?
There weren’t that many options, but luckily one of my friends is a mortgage broker. They found me a good interest-only deal with NatWest so I’m actually only paying a small amount each month.
It means that the rent my friend pays covers the mortgage and I’m left with a little bit over each month, which is reassuring because even if I lose my job I’ll still be able to afford the repayments on my flat.
What’s it like being a landlord?
It’s great because an old school friend of mine rents the flat out. Okay, so I didn’t get that ‘I’m a homeowner’ buzz and put pictures of me with the keys at the front door on Instagram, but it still feels like a big achievement.
It’s my home town, and obviously my sister lived there. The flat’s not far from my mum and dad and my nan and grandad. My parents actually suggested that I buy it when my sister put the flat on the market. I guess it was reassuring that I knew the area.
I was obviously worried as a landlord because of Covid-19. With so many people losing their jobs and unable to pay their rent, it could have had a big impact. But I’ve been really lucky as my friend/tenant’s job is booming, because she works in the fitness industry.
The only trouble with renting to a friend is that there are fewer boundaries, so when she got a kitten during lockdown I couldn’t exactly tell her to evict it. If we'd not been friends I might have told her she wasn’t allowed a pet, but oh well.