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So as some of you may know, I sold my London flat recently. I’ll warn you, the story of this flat is a bitter-sweet one and I have been itching to write this post but wanted to wait until I had officially put it behind me.
Part-buy, part-rent properties can seem like an absolute life-saver, especially if you want to live in London. It becomes more achievable – the dream of owning your own home is within reach.
I get it, I’ve been there.
But I’m writing about my experiences with you in mind. Its important to me that you know EXACTLY what you’re getting into. before you do.
When I decided to buy my flat, I was two years out of my disastrous long-term relationship. I was a 28 year old woman living in London with my parents and I was desperate to leave home and stand on my own two feet again.
As I know you struggle, I too was struggling to save money. The lure of living it up in London and going on holiday (a lot) was so good! I was earning decent money, but my lack of discipline meant that I was always overspending and always needing to pay something off. I purchased a car too, so this added to the monthly debt pile.
In short, my younger self sympathised with all those posts of people who say they have no money to build up a deposit for a home of their own. I blamed “the boomers” for ruining it for us “millennials”. I didn’t want to accepted that my lack of savings was my own fault. In my mind, I wanted to live for “yolo” to enjoy my life.
And so saving went waaaaaaay down the priority list…
The So-Called “Solution”
After those 2 years, I was starting to get desperate. My dream was to move out, but I had absolutely NO discipline to generate the deposit I needed. I then started searching for flats to rent out, but I couldn’t face spending £1000 a month on rent.
Eventually, in my search, I stumbled across a part-buy, part-rent scheme run by a housing association in my local area. THIS WAS IT! My way of buying a flat WITHOUT needing to built up a huge deposit. The rent and mortgage contributions came to less than I would be paying in rent to a total stranger, and I had enough for a 5% deposit of half of a flat already in my bank account.
My emotions took over – I thought I had beat the system! I found a perfect 1-bed flat in the area I wanted, and excitedly put in my application.
What Happened Next?
After nearly a year of waiting for the chain to work its way through, I eventually moved into my new home. It was bliss! I had my own space to do what I wanted at last. I still maintained my partying and holidaying lifestyle (which is why I got into serious debt, but that’s another story!), and I was just about making ends meet on my flat, bills, car payments, new furniture etc.
In short, it was a struggle, but I thought it was worth it!!
A few things then happened within two years of living in the flat.
- I left my job in obstetrics and gynaecology through burn out and stress.
- I decided to go travelling for 5 months after I left my job.
- I met my boyfriend (now fiancé!!).
- My boyfriend moved in with me.
- I started living part of the time in Leighton Buzzard with my boyfriend.
- I became a GP registrar (and took a large pay cut in the process).
Basically my entire life CHANGED within two years and became UNRECOGNISABLE. I would NEVER have guessed that this was going to happen.
If I had just held off for another year and rented, or had a crystal ball to see into the future, I would never have had to go through the process of buying a flat in the first place.
The Struggle I Had
As my relationship grew more serious, I decided that I wanted to live with my boyfriend permanently. I was getting tired of the constant movement between our places, and I just wanted out. So I put my flat on the market after two years of living in it.
What I wasn’t told by my “landlord” when I bought the flat was that when I decided to sell, THEY had first dibs on selling the flat to their network first and would take commission for the pleasure of doing so. The housing association I was with came round to take photos (badly) and listed my flat on their pages.
I had a few bites, but mostly no real interest. I was allowed 3 months to try and sell the flat with the housing association, but after that, I had to put it onto the open market.
It Gets Worse
The next bit they had “failed” to let me know about, was that when I put my flat onto the open market, if it didn’t sell at the agreed price, and I had to offer a discount, it would come out of MY half, not theirs. Plus I had to pay for their legal fees too.
The flat didn’t sell for a whole year despite being on the open market. I continued to pay for it, but by now I also agreed to buy a house with my boyfriend. I had no deposit money, and a tonne of debt, so the mortgage was all in his name. I was now paying for my flat AND half the mortgage and bills on my new house.
What a f****** Disaster!
Relief At Last
Eventually I got so fed up with working ridiculous amounts of overtime that I moved the responsibility of the flat sale to a new estate agent, and after redecorating my flat and having some professional photos done, the flat sold!
It was an agonising wait, but eventually I got there. It didn’t help my debt situation, but on the plus side, after I completed, I had a lump sum of equity that I used to pay off large chunks of debt and whittled it down to only one left which is now much more manageable and I can see the light at the end of the tunnel.
Now that I am free of it, I wanted to share this story with you and make you see that life can go totally topsy-turvy on you and essentially shoot all those awesome plans down in flames.
What Else Could I have Done?
I had planned to buy the other half of the flat so I would own all of it, but this was before I met my boyfriend, and before I decided I no longer wanted to live in London. I was seriously delusion for thinking that I could afford to buy the other half anyway – my finances were just not good enough for that.
I could have kept the flat and rented it out, but this unfortunately wasn’t an “official” option either because I only owned half of it and had to follow the rules of a tenancy agreement (despite the fact that I was liable for all repairs and maintenance within my flat like a fully-fledged owner).
Air bnb was too much of a faff, and I couldn’t keep travelling from Milton Keynes mid-week to maintain it.
Basically, until I sold it, I was stuck, and it was making my financial situation worse over time despite it being a so-called “asset”. This is precisely why houses ARE NOT assets unless they are making you money through renting out. This was most definitely not an asset and was a huge liability.
Could My “Landlord” Have Helped?
I felt like the housing association didn’t care about my situation throughout all of this.
They “said” that they wanted to provide affordable housing to people (which was their argument for not allowing subletting because it was “taking” a property away from someone who could buy it to get onto the housing ladder), but when it came to selling, they were not interested in buying the flat off me either.
In my opinion, this would have made perfect sense, because they would then have the ability to rent it out or sell it on again to these so-called “people in need”.
In short, the whole selling process felt heavily swayed in their favour to ensure that they got the best deal regardless of what happened to me.
The Moral Of My Story?
It’s very easy to say “shoulda, woulda, coulda”, but in this situation, there are a lot of “shoulds” that I should have done but didn’t.
I failed to think through the flat buying process rationally
I wanted to leave my parents house so badly that I found a solution that wasn’t quite right for me. I could have rented and saved money quite happily without committing myself to such a large purchase. If I had know how much my life would change in just two years, I really wouldn’t have bothered.
I didn’t have the discipline to clear my debts and save money
I really wasn’t ready to buy a flat, but I didn’t see this and did it anyway. I learnt about budgeting the hard way. On the plus side, my flat made a decent amount of money in the time I had it, but most of it has gone on neutralising my debt which has helped me out massively to be fair.
I neglected to understand the process of buying a part-buy, part-rent flat fully
I hadn’t asked questions like “what happens when I want to sell”, so when I did, I was completely on the back-foot and unprepared. Yes, the solicitor etc could have helped me understand the process better, but ultimately it was my responsibility. I should have read more first.
I took too long to sell my flat
I should have got on and sorted it way quicker than I did. However I allowed my emotions to get in the way (again), and couldn’t face the potential “loss” I would have had if I had to sell the flat at a discount. So I didn’t offer one and waited it out instead (ironically costing me more than the loss would have done in both money and stress).
I hadn’t considered looking outside of London to purchase a property
Being in London really isn’t the “be all and end all” of life, and I certainly could have got more bang for my buck had I looked elsewhere!
Is Part Buy, Part Rent A Good Idea?
So my initial thinking was that I would write a simple “pros and cons” appraisal of the part-buy, part-rent purchase, and while I will do this in another post, I really wanted to write about my experiences first.
In my opinion, is part-buy, part-rent a good idea?
It’s not the part-buy, part-rent process per se that caused me the problems I had, but instead, my entire lack of financial awareness in the first place coupled with a lack of understanding of what part-buy, part-rent actually entails.
I think it can be easy to get lost in the romance of buying a first property, and this can easily blind us into making a poor choice. House buying is not to be taken lightly!
From experience, the best advice I can give is to get your finances in order first. Clear debt, build up a nice safety net, learn to budget. THEN you can think about buying a property. After all, it is a debt you will have for a LONG TIME, so you better make sure it’s not going to cripple you financially first. Otherwise what’s the point?
Do your future self a favour and take plenty of time over this decision. You’ll thank yourself for it one day! Then, after this, if you still want to go for it, then do it! And enjoy the whole process. Buying your first home is so exciting. Just make sure you are making conscious, well-informed choices if you’re going to go down the part-buy, part-rent route so you don’t run into the pit-falls like I did.
I wish you the very best of luck!
Until next time,
If you enjoyed that post, why not try this one?