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0:00 as the title of this video goes I regret buying my first property here in the UK so a little background about myself I worked in a bank for 8 years I bought my first property in 2017 and so from then till now it's been almost 5 years so I'm doing this video after having this property for more than 4 years so I've learned a lot and my regrets have have materialized over the years and I wanted to make this video to pretty much advise and encourage anyone else who's trying to make this decision so they do it right um the first time and not have too many regrets down the
0:45 line number one my first regret was that it was an emotional decision for me what does that mean I went in with the idea of buying my first property because I was tired um I was tired of sharing my space with other people so before I bought my first property I was renting but I would rent with friends so I would get a friend and then come together with her and then go and rent a two-bedroom and then two-bedroom two bath was what I was really doing I did that for about 3 years two-bedroom two bath and then the things that I had coming up was I'd have family visits and they will be in the space of this other friend or this other
1:32 person I'm I'm sharing with um when things get spoiled it's like what happened here who spal it and then we have to fix and pay um just a little bit of misunderstanding here and there majority of the time it was great there was one friend I lived with which was amazing cuz I knew her for a long time so but before then there was one person I lived with which was really hellish for me so when I got to the point where I saved up some money I said to myself I need to buy my own Flats um right away and it being such an emotional decision for me didn't help me to make the right choice cuz I didn't take my time to research I didn't take my time to ask the questions and I just thought as long as I have a lawyer and I have a morgage advisor I know all that I need
2:17 to know to buy my first flat or my first property so take your time when you're buying your first property don't be in a rash because you are tired of renting or you don't want to give a l load money anymore you just want to put it in your own property cuz if you buy the wrong property to start then or if you put yourself in the wrong Arrangement let me put it that way then you have issues for the longer term the second regret was buying a new buil Flats H this one so new builds are interesting first of all when you go for viewings they are shiny they are new nobody has lived there before is your first flat excited you're like wow nobody has lived here everything is mine
3:04 I'm going to be sometimes you get the chance to even choose the color of some of like the the kitchen the kitchen area you can choose sometimes the color of the wall or maybe the flooring or the carpet so new builds usually come at a premium to the rest of the street or to the rest of the houses in the area so what you need to remember is that because it's at a premium naturally it usually depreciates quite quickly so within the first few years it depreciates very quickly to pretty much match up the rest of the houses or Flats on the street so in this case if let's say you are buying you are looking at the Flats on the street which are maybe 5 to 10 years old that will be your flats or your house in the next 5 years even though to you it's
3:49 new um so buying a new build was a regret for me because it depreciated it depreciated significantly to the extent that I was looking to sell um the flat four years after I bought it and the price I got was let me calculate was let me calculate the percentage difference was about 7 to 8% less than how much I bought it for and to put in context this was in London so technically the the prices of houses or flats here are more expensive than up north or even in the Midlands so 7% difference is significant it was going to be tens of thousands of pounds that I was going to lose when I sell it so I did a valuation and I realized that it
4:36 came down lower so I was quite sad that that happened because in my mind because I've kept it for 4 years the value of the property should go up and that did not happen now my third regret is that it was a lease hold now I think I've mentioned a few times here that it was a flat and most Flats in the UK are lease holds so lease hold means that you are leasing the land on which the property is built so because of that this came with ground rent and service charge ground rent is pretty much fixed and it's supposed to be paid yearly so I think around my ground rent is around £240 a year so it it doesn't really break the bank right but the second part the service charge is the most difficult one so when you're buying the property
5:23 majority of the time you're buying it from a developer and the developer tells you that oh service charge is this per square square meter per flat right so if your flat is smaller you have this square merriage and then you multiply it by the number they give you and it will usually be in thousands right thousands per year and then you'll notice that the moment you finish buying it this um this complex of flats is being managed by a management company and then they will start sending you service charge to pay and they'll give you account of what they using the service charge for so I was told that oh the service charge will usually increase the rate at which inflation is increasing that was a lie the service charge was increasing like crazy every year almost a th000 was
6:09 added to it and you can't really do anything because you live there it's your house it's your flat um so in this case it LO it looked like I was paying rent rent again and rent that even sorry I couldn't control because now I've bought the flat I live in there and then when a management company comes to say oh because of this and this and this the service charge has gone up all we have to do is pay we complained a lot on like our group page that we had for the whole complex but we still had to pay so that was one uh regret I had I wish I had bought a free hold rather than a lease hold flat to start the next one is buying the house in my name why so you need to look at this for
6:57 your own self whether you want to buy it in your name or in a limited liability company why it's a regret for me is that I bought a one bed flat cuz in my mind as I said before it was such an emotional decision for me I didn't want to share I wanted to have my own space my own little heaven where I've decorated with all the nice things I wanted in my house had my own TV had my own bathroom I didn't want to share anything um so because of that I was like he I'll just buy one bed it's even the cheapest so I bought this one bed and then and then I noticed that um later down the line I would my my plan my vague plan because I didn't really do the research was to just move out when I get
7:42 married in future or when I have a family move out and then rent this out now I get to the part where I'm now doing the research about moving out and renting what I live in and notice that I can't just rent it because one I would need to inform the the lender the mortgage lender that it's not a residential um flat anymore and it's a buy to let flat and in that case they'll need to change everything they'll need to change how I borrowed the money they would have to assess me again and then the second thing was also that [Music] um H the second thing was that I had used help to buy and I'm not going to go into help to buy into in this particular in this particular video but help to buy
8:29 equity loan and that also had the Clause that I couldn't rent it out and it needs to be my own residential flat um so that became a problem for me and the third part was that even if I happen to switch to a buy to let mortgage I will couldn't take the interest of the mortgage out of the rental I get before it is taxed and at this point I was around the higher tax paying rate in this country so that means that if I was was getting ,000 a month for instance and my my mortgage my interest on my loan or my mortgage interest payments was £500 I was going to pay tax on ,000
9:17 before I can take my interest out so because I was at the higher end uh of Taxation in terms of like my salary I was already paying about 40% and then after that I'm now going to take out the 500 which is the interest on the mortgage so now it didn't even make sense for me to rent it out so it got to a point I had this flat that I wanted I wanted to move out of to get a bigger one um and then I realized that wait I can't even rent it her cuz if I rent it out I'll be losing money rather than making money so that's when I decided okay let me see whether I can sell it and I noticed that I could only sell it for cheaper so in my mind I was just crystallizing losses in every angle that I was trying to turn to my next one was buying a
10:04 one-bedroom house on a ground floor now when I went to see this flat when I wanted to buy it there was only the ground floor Apartments left and for a good reason because in this country or in London most people like to buy flats that are on a higher floor than the ground floor but I really wanted to be in the area I really like the area and I was like see it's new build there's no other new built around I just really want this complex so I agreed to the ground floor flat and when I tried to sell it I noticed that anyone who comes it's like oh it's on the ground FL I don't have a view so I'm sorry I'm not going to buy this one which became a problem for me because now I didn't have any privacy on the ground floor anyone
10:49 can pass by and see in your balcony and see what's going on if your curtains are drawn anyone passing by can see what's going on in your Flats so my next regret was buying a one bed on the ground floor because a one bed were not as favorable to sell as much as like the two beds were so I put it in context um about 5 years down the line when I looked a lot of people were trying to sell their Flats in my complex because most of us used help to buy and the help buy equity loan you need the loan lasts for 5 years without interest so usually after 5 years people try to sell it and then those who bought two bedroom Flats who are trying to sell it there is like um about a 10 to 20% sorry no a 10% increase in the
11:35 asking prices that they've put on online those who bought a one-bedroom flat there's no increase in the asking prices that they've put online so they're pretty much asking for the same price that they bought it for um so naturally most people desire two beds compared to one beds so the fact that I bought a one bed didn't help and being on the ground floor didn't help at all now the last one which was a shock to me when I found out was when I decided to go on holiday and use my flat for Airbnb and I was told I cannot do it so it turns out that when I bought the flat which I did not know was in there because my lawyer did not point it out to me there was a clause that I cannot
12:23 use the flat or any of the flats in the particular complex for s accommodation or for shortterm lets for Less Than 3 months meaning I can't put on Airbnb now if you think about the fact that you've saved so much money in this country to manage to buy a flat in London and then you are going on holiday like oh I just want to earn a few coins because I'm away for like's say a month or two and you try to list it on Airbnb and get a letter from the management company saying you've breached the contract because you are now using your flat for service accommodation or for shortterm lets that was a shock to me because I'm like I'm buring all the financial cost of this building of this flat and
13:09 everybody just telling me what they want me to do with my flat um unfortunately I couldn't use it for Airbnb I had to cancel all the guests that were coming in um and I learned the lesson the hard way so whenever you are buying a flat please read the contract from front to back if you don't understand make sure your lawyer explains it to you to your solicitor one thing about the solicitors is they just pass on documents they give it to you they pass it to the seller they give it to a seller like they're just passing on documents they don't really sit down and explain stuff to you and it's your right for you to ask them questions cuz you are paying them so ask them so many questions if you read something in the contract and you don't understand go back and ask them if you read something you don't understand go back and ask them um so that you know what you're getting yourself into um and
13:56 in this case what I I made another mistake by using the solicitor that the seller which is a developer recommended so sometimes a developer will recommend a solicitor that you should use because the solic has probably worked with them before and knows all their processes so it makes things go faster but faster will come at a cost because the Soler will just you know do the process explain the surface things to you and just say okay let's exchange so that the developer can get their money so make sure you read that contract it was long but I wish had read it because I would have noticed that there is no way I can use this for Airbnb or even short-term accommodation down the line um so yes these are the things I wanted to share with you all about buying your first
14:41 property what I would recommend but you have to do your own research I would prefer to have bought a freeold apartment or a freeold house um as it stands now I would have preferred to have done my research well enough to understand that new builds usually um depreciate slightly after a few years before it starts going up most new builds but it's not the same in every area sometimes you buy a new build and when you want to sell it in 5 years it's gone up but the rule of time is that most new builds usually depreciate I wouldn't have bought a flat I would have bought a house and one thing about buying houses in this country is that majority of the time if it's not a newish house that's just been built or been built over the past 5 years you probably need to do some re Renovations
15:27 inside the house which will cost you some money so just be aware of that um because you probably want to make it your own so then you have to like change a little bit of how Olden it looks and make it a bit more neish for yourself but if I had a house I would have had maybe upstairs and downstairs turned one room into like a rental and rented that out and helped that would have helped pay my mortgage or like something um and maybe down the line when I got married or I wanted to build a family I could have just had uh my family moving or we could have use that as our main primary um place of residence and then had you if we had Surplus cash then we use it to buy a rental rather than you trying to move out of your current residential uh place which is a flat and
16:14 then now having to go through the mortgage continue to a buy tillet and then realizing that you when you're having your name you can't take the interest out before you pay taxes and it becomes messy so I hope you found this helpful share it with a friend if you do if you think this was helpful to you and if you have any questions just let me know down below yeah all right then catch you later
