Getting on the property ladder as a freelancer

gilly01625

Hi all,

I am a 25 year old freelancer working in the theatre and festival industry. I have recently moved to London, and am looking to get on the property ladder.

I am very much new and have no experience with properties as I have only ever rented before - since moving out of my parents house 7 years ago.

I would appreciate any help and support to get on the property ladder as I have no clue where to begin.

Thank you!!

Gonk1967

Have a chat with these guys… Contractor Financial Limited - Contractor Financial

They have a lot more access to the mortgages that would be difficult for individuals to source.

Essentially they will get you an approval in principal based on you day rate. Once you find a property they will then help you through the mortgage application process. They do charge for their services.

RAS

You'll need to start with a good deposit and the associated buying costs.

Of more immediate importance if you are freelancing is that you save everything you can into an emergency fund that can cover several months rental and living costs. Once that is secure, you can think about saving a deposit.

SarahB16

If you haven't already done so perhaps take a look on the website Rightmove to get an idea of sales prices in different areas that may appeal to you to check what you can afford in different locations.

If you are buying a flat don't forget to ask about service charges as you will need to pay that on top of your mortgage every month.

Catonthemoon

If you’ve relocated from somewhere like up North, brace yourself…you’re going to be in for a hell of a shock!

mta999

The shock being that if you buy a flat it will probably steadily fall in value as time goes by in tandem with the service charge inexorably rising...

Grumpy_chap

Does the OP have two (or three) years' accounts?

A good mortgage broker should be able to identify suitable products in the market based on the accounts track record.

HouseHuntingAmy

Welcome to London! A couple of things from someone mid-hunt at the moment. If you are 25 and buying your first place, look at a Lifetime ISA for the deposit - you can put in up to £4k a year and recieve a 25% bonus on top, which is hard to beat for first-time buyers (there are rules about the property price cap and holding it for a year, so read the small print). On the freelance side, lenders mostly go off your declared income from accounts or SA302s, so the run-up to applying is not the moment to aggressively minimise your taxable income - a broker who works with freelancers will tell you the same. And seconding the service charge point - on a flat it can be the difference between something that looks affordable and something that isn't.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6684175/getting-on-the-property-ladder-as-a-freelancer

How long have you been freelancing?

Do you operate as a sole trader or have you incorporated? Do you use an accountant?

As long as you've a few years history of trading then getting a mortgage isnt much different than as a permie. I've been freelance for 15 years and bought our first property 7 years ago. Some will just use your tax return effectively, others may decide to do things as a multiple of your rate rather than tax declarations.

gm0

Exciting project. Have your wits about you.

Make time to study everything you are sent or research about a property. Leases especially. Understand what you are signing up to and how it relates to what you saw on viewing and age and condition. Roofs. Lifts. Windows. Communal areas/facilities. Service charges and the costs to replace things at later stages - 20-30-40 years are strongly driven by these things. Understand that you pay towards all these "outside the flat itself" things in most cases. To run them, maintain them. And replace them when end of life. You will get a feel for this aspect of screening when property viewing after you have seen a few.

Some quite new London blocks are blighted by bad workmanship and early failed kit - out of warranty but way earlier than expected. Result big bills for flat owners and/or sometimes protracted legal disputes in the background with insurers, original suppliers and long gone or dissolved developer site companies each working to avoid paying - while owning residents are living with a problem.

Strangely enough some leases for flats described as priced for quick sale by agents - have incoming trouble undisclosed) - and are on sale cheaper than the "rate for the road" - making them SEEM initially attractive to the affordability constrained. But actually a terrible plan. The big bill is coming soon. Should this be discovered before too late in the process the seller discloses to legally defensible minimums as advised by their lawyer - then shrugs and says - condition you saw is already priced in. But is it? The discount for imminent major works should be a decent % of the costs about to drop where known - which may be saved up in communal funds. Or indeed not. It's not binary - 100% or 0%. It's a negotiation - relative to other options as exist for flats in the vicinity without the "known project" attached.

Studios.

In your shoes I would travel further on the rail or tube until I could buy a "proper" one bed or better. Not a one room studio nonsense. Hardest of all the ridiculously tiny flats to resell. Want to live further in. Rent one in a denser London BTL zone with big availability and a clear market rental price with organised corporate support system. (like many here in Manchester). You don't buy a single tiny cell in such a block mostly used like that as a solo private buyer. Many reasons why not. Hard to sell. Harder for you to rent out if you move away. And others.

Do your homework. Enjoy the chase.

poseidon1

OP welcome to London.

Rather than try to give you hints and tips, I thought I'd approach this from a wider perspective by sharing the article below -

https://www.thisismoney.co.uk/money/mortgageshome/article-15856059/Nine-ten-leaseholders-regret-buying-home-damning-new-report-finds.html

Although the survey pool was a small one ( just 1,200 respondents), I feel you should consider very carefully why such a high percentage of existing leasehold flat owners in this survey (in England ) would never go down that route again.

Like yourself, probably safe to assume they were largely first time buyers and in all probability entirely clueless about the complexities and hidden traps for the unwary the English leasehold system has become.

For many in new builds with cladding issues the fallout from Grenfell, must be particularly painful rendering some developments unsaleable until remediation completed. London is a particular victim of this scandal.

https://www.mylondon.news/news/zone-1-news/londons-cladding-nightmare-could-finally-33762146

My advice, try to stick to small 'share of freehold' developments preferably house conversions rather than purpose built. This may limit your search parameters considerably but less likely to find yourself wandering into 'shark infested waters'.