Nobody Panic - How to Understand the House Buying Process

Episode Date: March 29, 2022

Big breath: Tessa bought a flat. Stevie wants to know what it was like. If you or anyone you know are thinking of going through the flat (or house) buying process, this is the episode for you. Involves some WILD jargon, helpful hand-holding advice and something about paying for a war in the olden times which Stevie still can’t get a handle on. Subscribe to the Nobody Panic Patreon at patreon.com/nobodypanicWant to support Nobody Panic? You can make a one-off donation at https://supporter.acast.com/nobodypanicRecorded by Naomi Parnell and edited by Clarissa Maycock and Naomi Parnell for Plosive.Photos by Marco Vittur, jingle by David Dobson.Follow Nobody Panic on Twitter @NobodyPanicPodSupport this show http://supporter.acast.com/nobodypanic. Hosted on Acast. See acast.com/privacy for more information.

Hello, I'm Carriad. I'm Sarah. And we are the Weirdo's Book Club podcast. We are doing a very special live show as part of the London Podcast Festival. The date is Thursday, 11th of September. The time is 7pm and our special guest is the brilliant Alan Davies. Tickets from kingsplace.com. Single ladies, it's coming to London.

True on Saturday, the 13th of September. At the London Podcast Festival. The rumours are true. Saturday the 13th of September. At King's Place. Oh, that sounds like a date to me, Harriet. it. Come to the podcast.

Coming over the threshold and into this home. Tessa's carrying me. I am like a bride across our threshold. Oh! And then I go, oh, that's actually, that was bad actually. That's my hernia. And then we spend our wedding night in pain to get curled up.

That's marriage. This is my friend Tessa and I'm Stevie. And this is Nobody Panic where we do how-toes each week and try and like saw our lives out. And this one is a very special one. We're a very special person. This one, I'm the guest today. This one, I have been dilly dallying around doing for a long time.

It is how to understand the house buying process. And obviously a snappier title would be how to buy a house. But for lots of reasons that we're going to unpack, that's not what we've called it. And for some people listening, are like, are you kidding me? Of course not this. In which case, please be on your way. Sorry, people are saying, are you kidding me? of course not this. Why are they saying that? Because they're like, I can't, I can't even begin to

consider it, you know? But I can't. This is why this is a good episode. If you're listening, stick with me because the episode might as well be called How to Walk on Water. But I'm interested in it. Yeah, well, that's why I feel ever so anxious about doing it because I don't want people to be like, I can't walk on water. No, but I would love to know the process. If I could quiz Jesus on how we did that. Okay. What an episode that would be? So I think there's a very British and unhelpful tendency to if someone's bought a house or bought a flat, especially if you live in London, to go like, oh, I bought a flat, let's go. And this is like back away out of the room as if it's like the most shameful thing. Because essentially what you're saying is like, I have the privilege to be able to bought property and I know lots of people don't know, feel very bad about that. You're still a relatable gal. You did some great work. You got some money. You went in with your parents and you bought a house. It's fine. It's actually really helpful for people who have no idea what's going on to listen to someone related. like yourself.

Chatting about the process, if I may. Thank you so much. And I will try and lower my shoulders and not feel so anxious because I do have exactly that of being like, oh, I'm never so sorry. And I am aware that I was in a very lucky position. And anyway, but I felt very strongly that I wanted to do this one because when I was going through it,

it was only me and Martin's money tips. And he was my only point of reference. And every single stage of the process was such a colossal surprise. And I was like, why does nobody explain this in school? Like this is, this is a nightmare. So please just hang out with us, even if you're not even considering it. If maybe in the future you come back to this one or whatever,

or just hang out because I think it's nice to learn. Absolutely. I think it's interesting. And also because some of the very few things that you've told me, I like wild. Like I did not expect that. Well, lower your expectations for the wild ride, you know, just in case you're hoping for it to be exciting.

Sure. And also if you've got questions, TV, you know, throw them at me. Oh, don't worry. As and when. We'll sit by the fire. I've got to bring my anxiety right down about this one. I don't know Y&B, so crackers about it. Yes.

Okay. So, I was feeling very strongly about it recently because Kirstie Olsop came out of the woodwork to tell, I think she was being misquoted. I mean, I'm sure she said it, but I don't think she wrote the piece recently or whatever. I think they were sort of doing a bit of clickbait with her. But she was quoted in the Times. It was like, of course you can buy a house. And then she unfortunately referenced Netflix and brunch. and these sort of small lifestyle luxuries that a certain generation constantly level at the millennials

of being like, if you didn't have Netflix, of course you could do it. And then it said within the article, Kirsty bought a house when she was 21 with a family help. Yeah, 79 years ago. 79 years ago. And then it says at the bottom, if you saved up all the money from your 799 a month Netflix thing, it would take you 36,000 years to buy a house. And so it makes me very upset. So if anyone in your life

and coming at you being like, why can't you just buy a house? In their generation, it was totally achievable. And I've been trying to think about what an equivalent would be and I've trying to think of something that costs between £3,000 and $5,000,

Steve, and I've come up with a dog. You're not wrong, yeah. Or like, not necessarily just buying the dog, but like saving up for the dog, planning for the dog, you know, getting the dog bits. Stamp duty on the dog. Stamp duty on the dog, the vet's bills,

you know, or paying rent to the dog. dog to the dog. Dog to your landlord. So I think these are the brackets of things that for us, you're like, yep, that's my goal and I can save up for that. And so then imagine us in 40 years in the future and suddenly this generation are like, I could never ever, ever have a dog.

You'd be like, I did it. You just save up, you know, whereas they've not taken into account some statistics. And here I come with my statistics. Okay. In 1996, which I assume when, or before when Kersie was buying her house, the average London salary was 22,487 pounds, and the average London house price was 79,000 pounds. In 2002, the average London salary was 36,302 pounds, and the average London house price was 488,98,988 pounds. Right.

The average house price outside of London in the UK is 256,000 pounds, and if house prices had risen in line with salaries, the average house price in the UK should be £86,000. So that's how like out of whack things have got in the last. There's a constant thing of like, well, just move outside of London and it's really easy. But also it's still not necessarily easy outside of London cities. And in this, I'm sure there are spots in the UK, which is like incredibly cheap for house prices. And that's excellent. But obviously it's ridiculous to expect every single person to leave their job and go and live in, say, Blackpool. Yeah.

And that's probably really expensive. I'm just because where something might isn't. Right. Like, oh, God, yeah. So it's very much like, well, get out of London and go and live in a shed in a field in the middle of nowhere where there's no amenities and no people. And also, you can't earn money because your job isn't somewhere else. Yeah.

And you can't have any money. And it will still be a fortune. Yeah. And so, you know, it's the most pointless and unhelpful discussion to wheel out the boomers with their opinions. It's so unhelpful. This is an actual housing crisis as opposed to just because. like, we'll just save up. And then the other thing that happens, they wheel out the boomers,

and then the other people that they wheel out for clickbait is Arabella and Otto. I know you're going to say. And Arabella and Otto have written a piece in The Guardian called How to Buy a House. And then they've written, if we can do it, anyone can. And then they say that they bought their own coffee, and they made their own lunch every day, and they didn't go on their annual ski trip to Corchaval. And they managed to save £3,000. pounds. And then it says, also, we moved back in with Arabella's mother. We didn't pay a food, rent or bills. And Otto's godfather gave us 200,000 pounds. So it's like, if we can

do it, anybody can. Even if they're not giving the money, the fact that there's always either that or they move back in with their parents, where it's like completely impossible for, for example, myself, whose parents live in the north of England and I didn't have a job there. It's infuriating. And I don't know why we haven't just put this to bed have been like we never discuss this ever again. You know, it's completely pointless. The only thing we can discuss is like what can we done to get out of the housing crisis and what, how can we deal, you know. I honestly think they, that they are still trotting out those interviews so that people

share them because of outrage. I think they really are, yeah. And so I think if we see them in the future, we shall simply rise above it and we won't discuss it. So I have managed to do this. I, this is my guardian. If I can do it, anyone can story, which I share with you only in the hope that I've learnt some things and I hope they are helpful to you, but I'm aware that, as you will hear,

I'm in a very lucky situation. And I'll try and be as financially open as I can because information is power and why not. So at the end of 2019, I did some work for the Disney corporation. I've heard of them. I've heard of them, heard of Walt Disney. And Walt Disney wrote me a check certainly for more money than I'd ever made in the UK for anything. And I was like, oh my God, I've got my little, I've got a little hot little hands of cash here. It's a Nest egg. He's had a literal nest egg, you know, in one go. Right. And there it was. And so obviously, working for the Disney Corporation is a very rare situation to be in. And so please don't switch off now, but maybe you get a really good job or you come into some inheritance or you win the, you know,

you find some money on the floor. Find some money on the road or you get involved with the mob or what in any way that you, you know, you come into a bit of cash and you think, oh my God, maybe we can start this process. So I had this little bit of It was in total about after I'd given most of it away, to the government. You understood the IRS? The IRS took most of it away. And then I had about 35,000 pounds. And I was like, whole mama, whole baby.

And I had heard this thing about like, you need 10% cash, and then the mortgage people will give you the rest of it. And I was like, here we go. Here we go. And honestly, I remember being like, that's it. I did my part, which is I find the cash, and you, and now you just tick, tick, and you give me the house. And then I started the mortgage process. And the mortgage process is honestly one of the most stressful things I suspect most people will go through. There'll be other things, sure, but I'll

pop it in the sort of top ten. So I went into the bank and I was like, go on, go on, give me that. Look, I've got this. I've got this. What do you got for me, baby. give me that and they were like they honestly looked at me like I was a human shit you know they were like what are you talking about they're absolutely obsessed with salary being like what is your what's your salary what's your you know I'm holding one of them so here we go what do you mean I'm holding one of my salaries yeah here it is not the other salaries right I've given it all to you you give me and also this what's so unbearable at the mortgage thing is like I want to give you money I want you to loan me this money and then I'm going to pay it back it's

staggeringly high interest rate. As you've shown and proven that you can do because you've been paying astronomical rental fees for your entire adult life. So you've got a proven track record on even less money the year before being able to meet rental payments, but that's no, no, no, and not. I feel cross now even

thinking about it. So I was like the amount of mortgage that is less than the rental payments and they just, they don't care, they're so uninterested, they don't care about rental, they don't care about your freelance life, they don't care about anything. All they want to see is a salary. They're obsessed with salary. And so, and this is the thing that was a total surprise to me that I truly didn't know,

is that the maximum mortgage you can get is five times your salary. So if the average house price is £250,000, that means that you need to be operating at like a £50,000 salary for five times that. And you're like, what? Like, that's massive. And again, like the average salary in the UK at the moment is about £30,000. And again, back in 1996, the average, you're writing some notes? I'm literally multiplying.

your salary. Oh, fuck. Yeah. Fuck. You're going to, we're going to come up with some solutions. Okay. You and I, we're going to work some things out. So it's only five times your salary. And again, the average salary today is about £32,000, which is a mortgage for $150,000, which again, it's like, what are you going to buy with that, you know? And not to say it's not a massive amount of money. And yet, like, you know. Especially in London, we may more be skewed during this just slightly with our references,

just because like in London you can you can buy garage space for that amount of money. And in Manchester and in Leeds, I'm sure it's all very similar. But I think that's the thing like the average house by still outside of the UK is still 250. You know, you're still. You're still. And so when they invented this salary rule in 1996, the average house was 3.5 times the average salary. So therefore that was like so reasonable. You had your job.

Off you went. If he's going to have a house. Yes, you may. You worked hard for it. Well done. There you go. Now the average house is 13 times the average. the average salary. Oh my God. So like this is insane. This is absolutely insane. So you go in,

you say, hello, please, can I have a mortgage? And a word that might get bandied around if you start doing this process is a mortgage in principle, sometimes called MIP or an agreement in principle, AIP or a decision in principle, DIP. Why have they got so many different words for it? And the in principle just means that you've had a meeting with the bank and they've, they haven't approved this for sure, but they're saying this is, we think the amount of money we're going to let. you. So if you start this process and an estate agent might say to you, have you got a mortgage in principle? And you might say, yeah, in principle, mate, yeah, which is what, in a way. In a way, yeah, which is what I used to say? And then eventually I'd be like, Siri, what is a mortgage

in principle? I honestly thought he was emphasising the word in principle. And I was like, yeah, I guess. And so if you don't have a salary, if you're freelance, they will take your last two tax returns, sometimes you'll last three tax returns, and they will work it out from that. And so for me, I was a penniless little clown who'd never made any money before. So they were literally like, we're literally not going to do business with you. Like you love your nest egg. Love your nest egg. Go and throw out your tree because we're not taking it.

And I was like, this whole process took me about eight months of like of arguing. And if me just constantly shouting, I'm good for it. Like, I'm good for it. I'm going into the bang and shouting, I'm good for it. And they were just. But I was, I'm good for it. Like, why do it to me? Honestly, one banking person was like, you've got this money, but what if you never work again?

And I was like, yeah, we're all concerned about that. As if your main concern is that I'll never work again. Because if I stop paying on this thing, you just take my house. Like, that's the rules. So it's obviously sort of in your favour if I do negate on my mortgage, you know? Like, they should be just handing them out. Anyway, the handing them out thing is what happened in the run-up to the banking crisis of the big short. So I suppose this is why they're so tentative about giving them away.

Anyway, I go and argue endlessly about this mortgage and I say, please give me this thing. And they say absolutely not. And if you are freelance, they really, really do not like it. And so something I would suggest if you yourself are in this process and your freelance is that your tax returns, I'm sorry, this is an unhelpful timing because we've just passed the tax return deadline. So this needs to be for next year. But if, say, you've maybe done.

slightly shadowy tax returns in the past. And no one listening would have done, sure. But maybe as a freelancer, you've maybe, you know, diddled the figs. Dibble, dibble. You've dibbled the figs in the past. You've done some cash work that maybe you just thought, eh, take it to the pub.

I bought everyone a drink. Who cares? You know? Now is the time to whack that number up as high as you possibly can. To pay more tax to the government, which probably if you've dibbled in the past, you're probably just evening yourself out. Sure.

Perhaps. Now is the time to make that number of your income the highest you possibly can. Very simply, just make your income as high as you possibly. But I'm just saying, I'm just saying, for the dibblers. For the diabolus. But this, yeah, like my accountant, when she gives me the first amount to pay, she's like, that or I could push your expenses a little bit more.

And because I'm like, maybe one day I'll buy a house. I'm like, no, I'll pay that. No diddling for me. And sometimes it's not dittling. Sometimes it's legit, you know, smart tax work. But now is the time to say, if you have an accountant or whatever, or you do it yourself, now is the time to say to them, by the way, I'm looking to buy a house.

So can we work on this being the biggest possible number we possibly can? But there are some of you listening who'll be like, dibbling the fix. How dare you? That's your number one top tips. Like, probably most people that listen are on P.A. And are like, like, I dream of a dittle. So, like, you know, fine.

Your numbers your number. If you're on your salary, hold tight, I'm going to get to you in a second. I'm just saying to the dibblers, if it's freelance and what you can do. Anyway, so then they were like, we don't care about your nest egg. And I was like, I got this nest egg. And they were like, we're only going to take these last two tax returns

where you appear to have made 12,000 pounds. And we'll give you five times that. That's amazing. I mean, it was slightly more, not much much. Yeah. And that isn't even dibbling. Like, I just don't make much money. You know, they understandably, I was not an appealing prospect to the bank.

I can see that. You can see. We can all see. So then I get past to a mortgage broker. And this is somebody that you might have a meeting with. Instead of you can have a free meeting with a mortgage broker. You know, you're not obliged to pay them for anything. Please do go and have a first time meeting with several of them. Why not? Meet a bunch. Have a house party and just invite mortgage brokers. Have a house party. A bunch of mortgage brokers. See who you like the car of their ship. So I meant to meet this mortgage broker. I was bold that he specialised in overseas income and he specialised in the entertainment business. And he, you know, helped people who are generally freelance and bad at numbers. and he had these red trousers and he was completely spherical. I've told Steve this in the past by I tell you all now he had a completely red nose, you know, real alcoholic vibes. Look like he's in the House of Lords, basically. And he went, ho, ho, hello, like that.

And I don't actually remember his name, but I repeatedly referred to him behind his back, not to his face, as pork belly fellow. And he just looked like a ridiculous character. And I was like, absolutely ideal. Yeah, this is who I want. Let's get diddle in some figs. You know, like, let's do it. Anyway, he, and this is why when people are like,

a mortgage broker will fix it, it's like, I don't know if a mortgage broker always will, you know, sort you out. So this guy was not ideal. And he said, do you have any assets? And I said, yes, my name backwards is asset. And then he just looked at his paper until I saw him visibly, like, make a cross.

He was like, I'm going to take that. And I was like, no, I ain't got any assets. So we sort of discussed this, like, I don't understand how people without. salaries and jobs can ever like possibly i don't understand this what's the problem is and then he was like right what we need to do is is try and leverage you against something and i was like yeah i can do that what's that mean and so that it means if you have another house sure right great cool suggestion pork um well you got for me so like you can leverage it against land against how you can like

leverage things if you haven't if you're cash poor but you got stuck asset right and i was like this is ridiculous. Of course I don't have any of this stuff. Why don't think I've come to see you? And then he told me the story about how he just got a two million pound house for a 21 year old who didn't have a job and didn't have any taxable income. And I was like, perfect. Right. How did you do that then? And he said, I leveraged it against a faberget egg. Oh my. A faber she egg. Right. So this is the way I was like, right, pork. I don't think we are batting on the same page here. I don't have any of this stuff. That's making the whole thing so much worse. Yeah. You might as well I've just said to you, unless you're a queen, you can't do this process.

I was like, right, you're no use. And I suppose the people that he normally deals with are, I don't know, maybe crooks. I don't know who he deals with normally. Anyway, who are like, I've got all this cash. It's landed gentry. It's like, we don't heat our incredible massive house because it's a tumble down castle. So obviously not that. And then he was like, right, second suggestion, a bridging loan.

And this, just in case you turn off the podcast now, stay with me for 30 more seconds. If anybody in your life ever suggests a bridging loan, you run. You go, you run. Okay. A bridging loan is like we're doing deals with the mafia. Right. The bridging loan is like somebody will come for your knuckles. Like somebody will come in the night and chop off your fingers. A bridging loan is any amount of money you want in your banker hand within 24 hours.

And it is designed in the housing situation for people who are selling one house and buying another. And there is a crossover of like a month between cash going out and the cash coming in. And they're like, I'm a thousand percent certain on this money coming in. And I just need to make up three weeks. and which case the interest will be minimal and you pay the money back. If, however, anything goes wrong and you cannot pay that money back, the interest is astronomical and you will just bankrupt yourself and then somebody will come for your fingers.

Okay, never that. No. So he said this, I relayed it to an accountant who was like, get the hell out. Don't discuss it with him anymore. So I was like, right, now what am I going to do? And then a much more sensible mortgage person who I didn't pay anything to, I just happened to chat to, was like, you need to get in a team.

Okay? So there currently is no upper limit. Please check this, but at the time we're going to press, there's no upper limit on how many people can get in the house buying process together. Oh, okay. There's definitely lenders that can do very big amounts. The average bank is certainly happily take four of you. So now it's like, can you get in a team with your siblings or your partner or your friend even or your parents? And they don't have to, because this thing about like parents giving you money, like your parents don't have to give you money.

like your parents don't have to give you money but they could put their name on the mortgage for you right they might be like absolutely not i'm not getting involved with you you're you're you're you're a nightmare but presumably they can only put your name in the mortgage if like they are have some element of wealth for example if they don't have any money it'd be like well that's pointless well that exactly so that's what they suggested to me and i and they were like why don't you put your parents on this thing and i was like great as i was like mom and dad put your name go on just your names put your names on it and they were both like we haven't got any money either like we haven't got any mom was like, I just, I just do cash in hand.

And my dad was like, I'm retired. So like, my parents, like, neither of us have got the taxable income salary to give to the bank. So we'll rock up with our 5,000, like, 5,000 pound income. And you'll, and then they'll be like, right, brilliant. You've just added more people that can't get a house. Yeah, so now there's more people in the team who can't get a house. So I'm like, right, Coates. Like a sock puppet.

Yeah. I've got. I'm here as well, you know. So the three people in the house with. five times zero salary. So we're like, this is hopeless. So you do, if you're doing with your parents, you do and your parents to actually have a job and a salary and still be happy to. And they, am I right? And they don't actually have to put any money in. No money whatsoever. It's just that they have to show that they could speculatively something went wrong or, absolutely. They're just

saying, I'm, I'm involved here. It's a bit like if you were renting, if anyone's been a guarantor for you. It's entirely a signature. It's for them no jeopardy unless something does go wrong and then they are. So you do have to have an element of trust and you do have to be good for it and you do have to be to your parents like. And if your parents are self-employed, then that doesn't help. Exactly. I've never been able to use my parents as a guarantor because they're both self-employed as well. This is exactly what happened to me when I attempted to use my parents as a guarantor and went through exactly this. They wouldn't approve either of my parents.

Fucking hell. So I was like, right, this is hopeless. So me and my parents are only good to me. But do investigate just in your situation and be listening. Maybe your parents do have a salary. are prepared to put their name onto something for you to help you out. And again, you do need to be responsible enough to be like, it's just the signature I need.

Otherwise, I'm taking total responsibility for this. And then out of the woodwork comes my sister, Amy Coates. Now, Amy Coates is married, as well we all know. And Amy Coates is the most sensible soul you could possibly hope to ask for. And again, I've told people this in the past. But as teenagers, we went to work in a Christmas hamper packing factory. And on our first day, I was sent home for Backchat. and my sister was promoted to foreman.

So by the end of the day, she was the boss, and I'd gone home. I had to wait in the car park for her to be finished because we'd come in the car together. Oh my God, it's so good. She was so good at packing those hampers, and she spotted a rogue satsuma going into the wrong box at 20 paces. So she became the boss of the hamper factory. And any time we've done any work together, people are like, sorry, and you two are related, are you?

You too. Anyway, so my sister is like, I'll do it. And so now me and my sister get in the team together. And so if you are getting a team with somebody, what you want is, well, ideally what you want is both of you to be independently wealthy with a good salary. And best of luck to you all, you know, but nobody's in that position. So what you want is one cash pig and one cash cow. So the cash pig is me. I've got my little nest egg, but otherwise I've got absolutely nothing.

And after I give this nest egg, I'll, that's it. I've got nothing else to get. The cash cow doesn't have any savings, or in my sister's case, wasn't prepared to give me her savings, even though I was like, go on, put your savings in. Well, good for it.

Come on. I'm good for it. Put your savings in my house. So my sister is the cash cow. She is standing tall. She's got future prospects. That's what the bank are looking for. She's got her salary.

She'll make milk. She makes the milk. That is not necessarily part of the metaphor, but she can do. She's there churning her own bill. milk up. She has got her nice, sensible jobs, sensible salary, works in procurement. With the bank's like, yeah, thank you so much. If only we were selling you the house. Is only we were selling you the house? You're an ideal prospect for us. Thank you, said the bank. And then she was like,

I'm with her and there's me like on the road. How can I have an house? I've got, come on, look at this. I've got like all my cash is like like in coins spilling out. Be like, gone, I'm good for it. She's like, wait outside until this business is. done. So only in Signature is my sister on the house. God bless her. Thank you so much, Amy. I live there. She does not. And eventually, hopefully I will be able to take her off the mortgage. But she's my sister and you can get a solicitor involved. If you're doing it with a lover and I trust you both so much, all lovers listening, but do take it as seriously as a marriage. Yeah, pretty not. We know people who you think with the most solid relationship.

relationship in the world, they buy a house. He breaks up with her and now they're in legal fights in court about whose parent put money in and who owes what and, you know, so like just play worst case scenario because you'll be like, we love each other, who cares? And then down the line, it's going to be a nightmare. So, but me and sister, we just did a nice little word document. Anyway, so that's how we managed to get in a team. And so this is just opening your mind up to ideas about getting round the mortgage issue if you're in in this position. Yeah, so it's extremely demoralising, but there is options out there. That absolutely is, yeah.

Not for me because everyone in my family is self-employed, but for other people. Well, you've got a lover, so that's something. Who's self-employed lover, sure. At least there's now two of you, you know. At least you've gone up by double, you know. Oh, well, you'd hope. You'd hope. Or less or more.

Who knows? No, no, sure. But, yeah, at least two is better than one, you know? Always, yeah. And so, yeah, but it's not ideal, and especially being freelance. And people did say to me before I started, by the way, this is going to be one of the most stressful things you were done. And I was like, yeah, yeah, yeah, please. I've been to the Edinburgh fringe with Stevie Martin. I think I know about stress. And I didn't say that. I imagine if I did.

They'd be like, who's that? And why are you in the bank? Get out of Santander. Okay, just a few things about buy to let or help to buy or any of these sort of government back schemes. Yes, I've been looking at shared ownership. Yeah, shared ownership. When my friends has got shared ownership was like, never get shared ownership. And I was like, okay, I was into that then. Okay. So the thing about shared ownership is, And you think, oh, okay, this is a way around. I own 5%, and over time I pay off the other thing. Again, when things feel too good to be true, they often are,

the interest rate on the 95% that you don't own is going to be so large. That you actually will never be able to come out of it. You know what? In one sentence, you've absolutely, because no one's been able to actually explain to me in a way that I understand why it's bad. And obviously the shared ownership sides don't because I don't want you to know that. and my friend had a cladling issue but she just kept saying

I could never sell it and I was like I don't understand what you mean that must be what she's experiencing because I was always wondering like why why haven't you moved like why haven't you staircaseed do you know what I mean but she can't

it's exactly it so any of those sort of things they just need a lot a lot of research and small print and then you get there and you're like sorry the interest is how much and so it's that sort of thing of like here are these land of milk and honey options and you get there like

this milk is sour It's more expensive for you to buy that show ownership flat overall than it would be if you want to just buy a flat without share ownership. So you'll just be trapped in your 5%, you know, forever, always constantly paying this massive amount of rent. Help to buy is the banking scheme. It's over now. I am so sorry, everyone, but it was... I missed out. If anyone's listening, I missed out.

So don't worry. People missed it. But if you're in it, well done. And that's what I'll say on it. You either know what it is or you don't, but don't think, if only I've done this or this or this. Like those options really are not good options. And mortgage brokers, I really do think, try the bank first and really do see what you get together because a mortgage broker will probably take 1% or 5% interest or whatever they managed to get you.

So if that is, they managed to get you a 300,000 pound mortgage, then 1% is 3 grand, you know. That is all the money that Arabella and Otto saved. That's gone, you know? So just do be aware of it. Okay. So let's say we've got our mortgage. Thank God. Thank God.

We got it. and we're ready to rumble. And now we're like, okay, let's actually go start looking for houses. There is no reason, no matter where you are in your mortgage journey, that you can't pick up the phone right now and go and look at a house. You can do it. At any time, everyone says, oh, I have to wait until I get my mortgage and then I'll start looking. Ah, start now.

It's going to take you a long time of looking. And even if you're not looking for a house, nothing to stop you going and looking at a 10 million pound house for an afternoon. I'd be so stressing because I'd be like, what if I fall in love with it? Yeah, that would be my... It depends what sort of side of the spectrum you fall down on. Sure. Optimism or just increased and massive pessimism like myself.

I would say it's good to get a feel for things. Yeah, because also you might be like, oh, actually, when it comes down to it, I do need a wine cellar, for example. For example. And so I think it's like good to get a feel for things, good to get a feel of the area you want to be in, of the market. And maybe you'll go look at it and be like, right, well, you have to completely reassess. We cannot afford anything here.

We do need to go and live in the field or whatever. And so do get a feel of what's out there. A couple of words that I'd never heard before that will come up. The mortgage and principal thing, the estate agent will say to you, have you got a mortgage in principle? You'll say, in principle, and then you'll be asked to leave. They just mean, are you good for it? And you just say, oh, yes, I've got a mortgage.

Or you can say, I'm a cash buyer, which means they don't even have a mortgage. I've got so much cash in the bank. I'm just going to buy it outright. Which I presume those people didn't need this podcast episode. They don't need this podcast. No way. Because I thought cash buyer meant I'm going to give it to you an actual cash. And I was like, who would do that?

While holding a suitcase full of care? Yeah, I'm like. Who would do that and can I join them? And I'd like to be one of them. No, it just means you don't have a mortgage. And estate agents love to hear that because mortgages are famously nightmarish. And also they might say, are you in a chain? What's that?

Well, exactly. I said yes. Because I was like, I don't know. Obviously, don't just say yes. Like, just say, what does it mean to be in a chain? And it means you're selling a house. and so you're now a link in the chain. So you were emphatically not in a chain?

The answer was not in fact, no, I'm not. Again, they don't want you to be in a chain because it makes it more complicated and what if someone pulls out of your house, blah, blah, blah. So what you are is a first time buyer. That's the correct word for you. And if you like, you can say first time buyer, cash buyer or whatever, like, you know.

Other words, freehold and leasehold. Freehold means you own the whole property. It's yours. Leasehold means that you technically lease it from somebody else. And the lease... Well, I didn't. But I didn't want a rent. That's the whole point.

Leasehold, it still means it's yours. You can do anything you like to the property. Knock the walls down. Do whatever you want. It's yours. But at the end of the lease, you technically have to give it back. However, the lease will be like 900 years.

So what's the point? What's the point? They're often cheaper than a freehold house, but what's the point? Because I've heard that most apartments are lease. Most apartments will be leasehold, a converted building, or a building that was always meant to be apartments

might be a share of freehold. Jesus. Right? So there's all these words that you're like, well, now my nose is bleeding and I'm in the estate agents. A share of freehold means you share it with everybody else who lives in the building. Okay. So I am in a 1930s custom built house. There's eight properties in it

and we are all share of freehold. Like what do you have to do? Nothing. When you're in there and if you've got a leasehold or a freehold, do you have to pay anything? Do you have to chat to anyone? Like, what do you have to do? As the share of freehold, you're all responsible for like the whole outside of the building,

the communal areas, like stuff like that. It's quite nice. It's quite nice. Yeah, it's not bad. This is a thing. We're currently rowing about asbestos. So you can pay something called pepper corn rent, which means nothing. And why don't they just say it's nothing?

You've just got lost me. Why would you pay peppercorn rent? Who to and why is it? Exactly. There are so many stupid words. If you are a leaseholder, it might say on your contract, when it says you owe ground rent, which is your rent to lease this property. What the fuck?

So you're paying rent annual mortgage? Yeah, yeah, but wait, but your ground rent might be peppercorn rent. Okay. Yeah? Yeah, and that is... Nothing. It means zero. You don't owe anything.

Why don't they just not say that? Why don't they just say zero? Well, they just say nothing. Just be like, just live your life. Just live your life. There should be a section called live your life. But instead, it says the ground rent on this house is peppercorn, you know? If I saw that, I would set fire to the paper.

I was saying like every page of the bloody thing is that. You're like, cross this out and right, live your life, you know. So now we're getting to the slightly nice a bit, which is we're actually looking at houses. And I want to make a list of all the things that you think you want in a property that are like absolutely non-negotiables. And then that list will decrease to about one. Of course. While you quietly are like, okay. So for me, I was like a garden and I want to live in the house that the Browns live in Paddington Bear.

Okay, yeah. I wanted to have an attic and a circular room and beams and blah, blah, blah, blah. And eventually, as positive for me is I was obsessed with having a garden. And so I was only of being shown basements. And I was like, oh, this is very dark down here, isn't it? And then it turned out I don't need a garden. I don't actually grow anything. What I needed was just any space.

I needed to be outside. A balcony or a roof terrace. A balcony, a roof terrace. So that was a real game changer for me. So make your big list of all your things, then keep being like, what can we maybe negotiate on this? And so for me, my flat is absolutely tiny. It's £300,000, which is vomit-making.

amount of money. But, you know, the compromises for me were it's absolutely tiny and it's in a place I think is adorable, but is difficult to get to. Interesting. Because I would have said it's a very, it's a very good place to live. Oh, it's a lovely place there. But I would say the reason I could be there, I think, if that flat was in Hybrina'slington, yes. It would be twice the price, I think, because it would be next to the tube. You are a buswoman. I love the bus. And as you know, I like to go on an electric jump bike. These are my personal compromises. And yours will be different. You might be like, I want to live inside old street. I'm a mole. I want to live underground.

I love to be underground. I need to be as close to the tube as possible. Or I need a massive garden. Or I need X, Y, Z. Or I need the wine cellar. And no matter how rich you are, unless you're maybe, you know, Elon Musk, you will always be dreaming of something that is one above your category. Okay.

So last couple of things towards the end. And I'm going to say you're going to need to look at like 40 places. Okay. Keep that number in your head. 40. I'll be like, test said 40. So I just keep doing the numbers. and an estate agent don't trust them totally like they'll help you but ultimately they just want to sell a house like they want to sell the house and go to bed just trust your gut all the time and if they're like while you're here don't look at another one just be like yep why not just it gives you a solid understanding of what's out there what's available what you can afford like the difference between me on my very first one being like in principle at the man and me by the time i got to the end i was like so confident and so good about what i wanted and so start that process so you found one you love it if it's been on the house

on the market for like six months and nobody's put an offer in, by all means sticking an offer way below, you know, why not? Shoot your shot. Two pound 50. Two pound fifty. Two pound. One peppercorn, will you have it? But if it's come on like that day and there's already interest and it's inside your budget, I would say just offer the asking price. And again, this is not a financial advice. Please do not listen to anything I'm saying. But in general, like, so say you offer 10,000 pounds less, whatever, if they've got eight offers come in, they're obviously going to be like, well, not that one, you know? Yeah, understood.

Whereas if this is the first offer they've had in six months and you've offered 50 grand less than the asking price, they might be like, fuck it, yeah. Should you be suspicious if there's been a house in the market for six months and no one's offered? You should just be like, why hasn't this sold? So just get them to be honest with you about what's the worst thing. And they will absolutely call you up and chase you and be like, what do you think of this property?

Not because they think it's amazing for you, because they want to sell it and get their commission. Yes. So just be brave and confident of me like, you know what, it's not for me. A guy took me around this place. That was everything I had said I didn't want and he took me around it anyway. It was so bleak. It was awful. He was like, what do you think? And I said, Emmanuel, if I have to live here, I'll die. And he went, yeah, should we put in an offer? I was like, no, we won't put in an offer. You know, that's how much they literally don't care what you think. Okay. I said, I'll literally die if you make me be here. So yeah, he's like, yeah, it's a competitive market, so putting an offer, I reckon.

But just stick to your guns, stay in there. You will definitely lose hope, but you'll find it again. And yeah, the asking price thing, like, just be suspicious of things that have been on the market for a long time short. But maybe they'll say there was a buyer, but it fell through, you know? Fine. Love that. Maybe the person couldn't get their mortgage or pulled out last minute or whatever,

and it's like no fault of their own. It's just back on the market. You're like, oh. There was a murder in the house. Exactly, but if it was a murder in your house, you're like, you know what? Not for me. Yeah. Okay.

Well, it comes to the end of the process. You put in your offer. then you'll think like, well, it's done. In we go. But, oh no, you will have several months in which you and some solicitors argue about the house for a long time. And this is a very boring but very important process when they're like, is it on a cursed burial ground? Is it sinking into the road? Is there about to be a tram line put through and the owner knows and is selling it on the cheap? This is good because I remember there was a problem. I got obsessed with Japanese not we. Yeah. Because that goes into the walls. Some people try to sell the house.

And then you can never get rid of Japanese knotweed. And it will eventually crumble the house. So always ask about Japanese not weed. That's my one tip. 100%. This job is called a conveyance. And this is the job of being like, has it got Japanese not weed?

I imagine you have to pay for that. You do have to pay for it. Again, this is why when they're like, we save £3,000. It's like, we're about to pay another £1,000 from a man to ask if you've got Japanese not weed, you know? So it's like, this is why these stupid, look how much we can save for our coffee is so infuriating.

Anyway, but we've established, they've for ClickPay, and we all know that we're doing it. After they've said, it's not sinking into the ground. There's no Japanese knotweed. We think this house is good. Someone will also come around and value it. And if they put in a value that's way below what they're selling it for, you can say, can we split the difference?

Can we reconsider this? Oh, good fun. Yeah. So my house actually valued at lower than the asking price. And I was like, my mortgage will only give me what's based on the house. And then they came down in price. Nice. Because the house was so, I mean, I think it's adorable.

like Little Miss Honey House, but it's absolutely hasn't been updated since the 70s and everything is... Oh, there's holes in the walls. Oh, they're everywhere and it's completely crooked and not a single wall is straight and everything's falling apart. And as we've established, the house is full of asbestos. So... It's also full of wasps when I came around.

Oh yeah, and full of was. Stevie came around, it was full of wasps and I had to pretend they weren't wasps, they were wasps. So listen, the house's got plenty of problems. But if you think it's got lovely bones, as I do, and you think you can deal with the wasps and the holes and fix the stuff, that it's like, yeah, go for it, you know.

Anyways, then you decide whether you're going to go interest only or repayment mortgage. This is your last decision to make. Your interest only mortgage, you can swap between these throughout the lifetime of your mortgage. Your mortgage is about 30 years long. Interest only means, so say I lend you £100,000, I want 1% interest only every year. So you just give me £1,000 every month for the duration of the mortgage, which is like, you've got a sweet deal.

but at the end of the 30 years, you still owe me £100,000. In interest? No, no, no, you've only paid the interest. I've only paid the interest. So sorry, right. So I gave you £100,000. Oh, so that's like nice short-term, long-term bit of an issue. Stevie, you are getting it.

This took me all afternoon to grasp. You've absolutely smashed it. Option repayment mortgage. I give you £100,000 and I want half a percent interest and 2% repayment. So I still make a little bit of interest. interest money. So then the end of the first year, your amount has now gone down to £98,000. But then it means your interest is only on that 98. And then the following year, it'll be 96. So you're paying, it was almost like you're paying, I suppose if you're paying rent, but you're, you're not throwing

that money away. You're paying off your house. Exactly. You're paying off the house and each year it will go down. I know which one I'm going for, guys. I know which one I'm going for. Brilliant. What's you going to go for? The second one. Fantastic. That's it. Let's get those paid off. You can also overpay up to 10%. You lost absolute music to my ears. So if I get a little nest egg, throw that in your mortgage. If another little nest egg comes in, let's overpay. We can overpay up to 10% of the mortgage value.

Okay. Gorgeous. And so this is a sort of shit. They'd be like, wouldn't this have been cool to learn at school when someone was like, should you take interest only or repayment mortgage? But imagine if someone tried to teach you that when you're like 14. You'd be like, shut up. Pythagoras again, please.

You know, we don't want to hear this. But this is why this podcast episode is golden and you should give it to anyone who's looking to buy a house. Okay. And then the very last thing, so I know this has been a long episode. These are just such good words I had to tell you about them. Gazumping and gazanging, sorry? Gazumping is when another buyer swoops in at the last minute and offers even more money.

Oh, so tough. And that can happen at any time until you do the exchange of contracts, which happens like an hour before the exchange of keys. And so that's after the conveyance thing. After the conveyance thing, after everything. They should sort that out because that's not fair. I know. At any moment, this whole thing can crumble.

I see now why it's stressful. Right? At any moment, they could take it away from you until they literally put the keys into your hand. And gazanging is when the buyer decides to back out of the sale. Ooh, I would hate that too. Right. And at any moment, anything,

you're going to be in all the way down this process, at any moment any of these things can happen. Do you get your money back if you get... Nope. Oh! Wait, wait, wait, wait, all your money, all your conveyance. money. I feel like unless you get every single penny back that you put into this, if it's not your

fault, you should get every single penny back. No. Or your solicitors, your mortgage broker, your conveyancing, everything like that. That's gone. Okay. Okay. So just like there's so much to be ready for that you just think everyone's going to be nice and everyone is not nice.

Understood. But they're being not nice because they're like, this is the biggest financial decision you will ever make in your life and we've got to take this seriously. Right. I swear to God we're coming to the end. You've been saying this for 45 minutes, but I love it. Stop it. I'm into it.

No, no, but I want to know. When you send your massive amount of money on the day, the final day, because that's the actual house price money, you pay your bit and the mortgage lender directly pays the person. So the mortgage lender, you never see that. You never see them or the big money. It's a shame because it'd be nice to see it. It'll be nice to see it for a second before it goes out, please.

While all that money's in there. No, they just give it directly to the person. And then you're like, and me as well. And you give your... And yours looks like pathetic now. Right? Your next egg looks like lame in comparison. And you're just like pop it in the pot.

It's nothing. When it goes out of your payment, you have to do a CHAPS payment. And a CHAPS payment stands for clearing house automated payment system. Chaps. Adorable. So that's just a nice word. So it's something to look forward to on the process.

And then just when you think, oh, that's it. We're finally done. We've paid all the money. You got to pay stamp duty. Oh, okay. What's that? And this. truly is the last thing I'm going to tell you. I swear to God.

The last stamp duty is constantly changing and the government, when you see the government be like, we're trying to help young buyers by changing stamp duty. So stamp duty was introduced in England in 1694, William and Mary of Orange to raise money for the war against France. And they're still raising that money now, are they? And we are still paying off that war. Here's a nice thing. There is no stamp duty up to 500,000 pounds. That's good. That's good. I like that, yeah. That's nice. And then over 500,000 pounds, it's between 2% and 5% of the remaining value, which is a lot when you think you're finally through the woods. What's it for? Was that actually going to be still? It's for the war.

You're not actually still paying off the war. It's the war, Stevie. We've got to pay the war. It is goes to the government. Don't they have enough money? Right? Oh, I'm exhausted. Okay, right. That's a real kicker. Right. the last minute. Right, right at the last minute. Right at the last minute. Right at the last minute. Right.

No one expected that twist. That finale would not work. Right. And it's the very last thing as well when you finally think you're done. They're like, oh, sorry, stamp duty. And you're like, I'll stamp. I'll stamp your duty if you like. And then, but first time buyers often have a stamp duty relief.

If it's under 500,000 pounds, then there's nothing. So that's also nice. I'm telling you, mine will be. Yeah. And that is truly the end. We're in. Here are your keys. We're across the threshold.

We're in. I'm clapping you for that excellent episode, but I'm also clapping you for having gone through the process. That's really great. Well, so increasingly I would come out of these many things and be like, I think I'm quite thick. Like, I think I'm not a very smart person. No, you're not.

It just sounds incredibly complicated. There is a lot of self-learning to do along the way. So I hope, for anybody listening, That was helpful. It was. It was. It was. And answers some questions.

And if you're listening and you're thinking of gazumping or gazanging, just don't. Don't gazump or gazanging. Just don't do that. It's so mean. You've come so far. Thank you so much. And if you're listening and you would like any financial help, any financial help, don't listen to this podcast any further. Don't get in touch with this.

But do get in touch with this. If you have any episode ideas, we've got some lined up. I know I've got a backlog of DMs and I have read them. And we will. be doing them and I'm very sorry that we've prioritised some of the other ones, but that they're coming. And if you've got some more, please to DM us at Nobody Panicpod or email us Nobody Panicpodcast at gmail.com. Goodbye. Goodbye. Thank you so much for listening. Bye-bye.