The Cost of Buying a Flat in East London
Early last year, my partner and I were lucky enough to become part of that small, privileged group known as “Millennial homeowners.” We bought a little one-bedroom flat in East London, and though the buying process for us was remarkably smooth, it was by no means cheap. Almost a year to the day since we had our offer accepted, here’s what it’s cost us to buy and live in the flat we now call home.
Buying the flat: £375,000
The flat itself cost us £375K (around $470K according to the exchange rate when we made the purchase). We put down a ten percent deposit, comprising money we’d saved, early inheritance money my partner was given by her mother (specifically for the purposes of us buying a house), and a small amount of money from the U.K. Government as a bonus for the money we put into our Help to Buy ISAs. (An ISA is a tax-free savings or investment account. You fund it with post-tax dollars, but don’t have to pay any tax on interest or other growth — and the government gives you a £50 bonus for every £200 you put in, with a maximum bonus of £3,000.)
Mortgage arrangement fee and broker: £1,498
We went through a broker to get our mortgage arranged, and are very grateful that we did. She and her team were great, and though our salaries comfortably covered the mortgage we needed, it was very reassuring to have someone else ensure that we did all the paperwork correctly and got the best deal.
Legal fees: £1,670
We were lucky to have a family friend act on our behalf, with a small discount from her standard rate — she’s a very experienced conveyancing solicitor and was able to answer our (many!) questions and keep the process moving along. This figure includes all the searches, property registration, and the portion of the ground rent which the seller had already paid. We also paid for a Declaration of Trust, as my partner and I aren’t married — this sets out who owns what share of the property, and what would happen if we were to split up.
We had a HomeBuyer’s Survey done — this is the middle-expensive option of the three standard surveys available, and was suitable for us as our flat is relatively new (about 12 years old). If the HomeBuyer’s Survey had brought up anything of concern, we would have gotten a more extensive survey done and negotiated money off, but thankfully it raised no problems.
Stamp duty: £8,750
Stamp duty is a tax you pay to the government when purchasing a property over a certain value. After the deposit, this is the typically the largest cost involved in buying a place in the U.K. and is calculated as a percentage of the value of the house.
Packing material: £40
We spent about £40 on boxes, bubble wrap, tape, and all that jazz.
Van hire and fuel: £186
My parents had offered to help us move, and it turned out to be cheaper for them to hire a van in their city, drive to us, help us move, and drive it home.
Parking suspension: £83
We arranged for two spaces at the front of our rental property to be suspended for the weekend so we could park the van. It cost us £83; I don’t know how much it cost the two people who didn’t read the large yellow sign about the bay suspension and ended up having their cars towed!
We were planning on doing the cleaning ourselves, but ended up paying professionals to do a far better job in a much shorter time. Definitely money worth spending!
We got our full deposits back from our old landlord, which was a relief, and more than covered the cost of the cleaning.
My partner and I had both in rented accommodation for years, which meant we had almost no furniture. A couple of trips to Ikea later, we had most of what we needed, including a lot of “double duty” furniture (like the sofa bed that also has storage inside it). We also needed various appliances, such as a microwave, vacuum, and iron, and have bought a few other bits and pieces in the last few months now that we’ve lived in the flat and have a better idea of what is and isn’t working for us.
Paint and tools: £177
I love painting walls! So far, we’ve painted the living room, kitchen, and the bathroom, and have paint left for the corridor and bedroom. We also needed various tools that, again, we hadn’t had need of as renters.
Life insurance: £420 (to date)
My partner and I decided to get life insurance to cover the mortgage — we don’t have any kids, but we obviously have a pretty hefty mortgage these days, so this would take care of the mortgage if something happened to one of us. We also have a couple of smaller critical illness policies.
Everyone should have a will! Now that we have actual serious assets together, we’re in the process of getting wills drawn up (we’re just waiting for the final copies to sign). Again, this is particularly important because we’re not married, so this ensures that if something happened to one of us, the other would inherit their share of the flat.
Maintenance and repairs: £2,754
This includes replacing our ill-fated water heater, plus a new extractor for the bathroom and a couple of other bits and pieces.
Mortgage payments: £13,395 (to date)
We’re on a fixed rate for the first two years, so we’re saving around £200/month compared to the costs of our old rental place.
Service charge and ground rent: £1,665
Our service charge includes our water rates, along with all the costs of managing and maintaining the block.
I haven’t included things such as council tax and utilities, which are costs that we were paying as renters as well, and which haven’t changed much.
All in all, we’ve spent £67,870 in the past year on buying, owning, and maintaining our flat. That splits out as £19,642 on owning and maintaining the flat, and £48,228 on actually buying it.
The rent on our old place was £1,650/month for a two-bedroom townhouse with more space, but which had been a rental property for a number of years and would have needed quite a bit of work to bring it up to the same standard as the flat. The rent was also likely to go up to £1,700 a month if we’d renewed our contract. If we’d continued to rent, we would have paid £17,000 in rent over the past year, plus £120 for renewing our contract. If you omit the costs of actually buying the house, we’ve spent £19,642 this year on mortgage payments and the other costs associated with running the house, and given that we’ve both replaced the water heater and bought a ton of furniture, I feel okay about those figures. It seems like, at least at the moment, the cost of living in our own place is much the same as living in a rented place.
On the other hand, we haven’t exactly saved money (in terms of everyday living costs) by moving into our own, smaller place, and we don’t know how much this purchase might benefit us financially in the long run. The housing market in the U.K., and in London particularly, is unsettled at the moment. Our area seems to be doing okay, and a one-bedroom flat near the tube in Zone Two is generally going to be a safe bet, but it’s also unlikely that we’ll make much of a profit if we decide to sell in the future.
But that was never the point, at least not for us. We love where we live — and for all the problems that go along with owning a property, we both wanted the security of having somewhere that’s ours, somewhere we can make our own, and that allows us to stay in our little corner of East London.
Ellie lives and works in London, and spends her free time borrowing too many books from the library.
This story is part of The Billfold’s Moving Series.
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