A LONDON lad who was brought up in a council house bought his first home aged just 23 – and managed to knock £20,000 off the asking price by haggling with the seller.
Mahim Hossain, now 24, had been saving since he was 18 and at university to buy a house before marrying his childhood sweetheart Zainab, also 24.
The couple, who met at school aged 14, bought their £270,000 three-bed house in Erith in May last year.
The pair knew it wasn’t possible to buy near where they grew up – Mahim in Stockwell and Zainab in Peckham – so they extended their search to the Kent border in search of affordable house prices.
They ditched the idea of using a traditional agent in favour of auction house brochures to see if they could find a deal.
After finding their now home with a guide price of £290,000, Mahim approached the seller directly to ask if he could buy it for £250,000 – a figure that was far too low to be accepted.
But after a week of haggling over the phone, the seller agreed to sell the house to Mahim for £270,000, as long as he could turn the deal around in a month.
Mahim and Zainab already had a mortgage in principle with Halifax and, confident they could meet the deadline, put down the £24,000 deposit.
But Halifax withdrew their offer after finding out the home was being sold at auction leaving them with less than a month to find the cash or risk losing their deposit.
“One thing you need to consider when buying a house at auction is the time scale you have,” explains mortgage advisor Holly Andrews from KIS Finance. “The sale must be completed within 28 days after a successful bid at an auction.
“As long as the mortgage can be arranged within that timescale, you shouldn’t have any problems although that could put off some lenders.”
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Eventually the couple were accepted for a deal at Barclays and had the money ready in time to pick up the keys in May, ahead of their wedding in September 2018.
Since then, they’ve spent £40,000 renovating the house, which has since been valued at £345,000.
We spoke to Mahim for this week’s My First Home.
Tell us, what’s your house like and when did you buy it?
Me and my wife Zainab own a three-bed house in Erith, which is technically in Kent but also in the London Borough of Bexley.
We both grew up in London and ideally we wanted to buy a place there but we just couldn’t afford to. The house prices are so expensive.
It’s a three-bed family house so an investment for the future. It’s freehold and an end of terrace.
It’s not a new build but is on a development. It was built in 1995 and we’re the third owners in the property.
We bought it in May last year but because we’ve been doing so much work on it, it’s still not finished.
We don’t even have beds in the spare room yet. It’s not a priority at the moment.
How much did you pay for it?
We bought it for £270,000 with a £24,000 deposit. It was under value massively but that’s because we didn’t go down the conventional route.
Initially we were looking in Chatham but we just couldn’t afford anything there so we had to widen our search. I didn’t care how far on the edges of London it was, as long as I could see a red bus.
I looked through auction catalogues to see if I could get a deal on some property that way.
I found this one that had a guide price of £290,000. It needed a lot of work doing to it, but it seemed like the right size that we were looking for and knew that we would have the time to do it.
We had a look around and loved it but instead of going to the auction I went directly to the seller.
In my head the maximum we could afford was £275,000 but I offered him £250,000. He practically laughed me out of the office because he said he could get at least £280,000 at the auction.
Later that week, I called him a few times to see if he’d reconsider my offer and after a bit of persistence and nagging, he agreed to sell it to me for £270,000 as long as I could get the sale through within a month. If I couldn’t, I’d lose the deposit.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa – It’s a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there’s a maximum limit of £3,000 which is paid to your solicitor when you move.
Help to Buy equity loan – The Government will lend you up to 20 per cent of the home’s value – or 40 per cent in London – after you’ve put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa – This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25 per cent on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you’re restricted to specific ones.
“First dibs” in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative – A Government scheme that will see 200,000 new-build homes in England sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest on the Starter Homes website.
At this point, we had a mortgage in principle with Halifax so I knew that we could afford it but when we told them we wanted to go ahead, the lender withdrew the offer because they didn’t like that it was an auction house.
It still gives me chills to think about that time. Almost all of our savings were at risk, which the solicitor was very clear about.
We got a broker straight away and were offered a deal from Barclays, but they still had to survey it before we could complete. That put an extra stress to the process because we needed it done before the deadline.
Luckily, they agreed with the property value and In the end, we got it all sorted a week before the deadline.
Looking back, it was worth taking the risk because we’ve needed a lot of cash to do up the place but it could have gone very differently and we could be in a very different place now.
Our mortgage was for £246,000 which we agreed to pay back over 20 years at an interest rate of 2.4 per cent. We locked into a five-year deal and at first our monthly payments were £1,280.
They could have been smaller if we’d taken it out over a longer period of time but we knew we could afford it and we wanted to be mortgage-free sooner, really.
How did you save for the deposit and a wedding at the same time?
It was a lot of work, I’ll say that. By the time we bought the house we had £33,000 in savings, £4,000 of which was for the wedding.
Me and Zainab met when we were at school in year nine when we were just 14 – so we’ve known each other for 10 years.
When we turned 18, Zainab wanted to get married but I grew up in a council house with my mum in Stockwell and vowed that I wouldn’t have a wedding until I had a roof over my head, so we had to compromise.
We had two savings accounts, one for the house and one for the wedding. We had been saving for a house longer though, as we started when we were 18-years-old but opened up a separate savings account for the wedding.
Zainab has always earned more than me as a mental health nurse so we were putting the same amount into the house fund and she was putting extra into the wedding fund.
After I got a promotion in September 2017, I was able to then start paying into the wedding fund too.
We both lived with our parents and I paid my mum £300 a month to go towards me staying there, while Zainab was able to stay at her parents’ house rent-free.
My aim was to just work as hard as I can at my job to get a pay rise. Since 2017 I’ve been promoted three times.
At university, I worked weekends working in the ticket office for TFL earning £900 a month. Back then I saved £250 a month, the rest went on living costs.
I now work in human resources and recruitment in the NHS and brought home £1,400 a month earning £21,000 a year when I started out. At that point I was able to put £500 a month aside into savings.
Every month I spent £200 on a car I bought on finance, £50 for a gym membership and £50 on a phone. Whatever was left was what I lived off.
My salary went up to £24,000 a year in the August that year, and again in March 2018 to £27,000 – the same as what my wife earned.
That allowed me to save £1,000 a month and Zainab did the same.
We spent roughly £37,000 on the wedding but our parents helped us out with it. I put in £4,000 and our parents covered the rest.
We didn’t have to give anything up while we saved but we were careful about what we spent money on. Like we’d limit ourselves to a certain number of nights out and then budget say £50 for the night and no more.
I suppose we could have saved for the wedding first but that would have meant we would have had to live with one of our parents because in our culture you don’t move in together before you’re married.
But I wanted to be able to marry Zainab knowing that we had a house for us.
How can you afford to do up the house as well?
We have £40,000 to spend on doing up the house.
It was in a pretty bad shape when we bought it. All the rooms were closed off from each other, it needed a new boiler, there was a leak on the second floor and it only had single glazing.
I had £3,000 leftover when we moved in, after all of the legal fees were paid for, which I used to replace the boiler but we’ve each taken out a £10,000 personal loan to carry out the remaining work.
I took mine out with HSBC and Zainab with NatWest and we’re charged around 9 per cent on the five year loans.
We called up the mortgage provider to see if we could add the loans to the mortgage and ask for some additional borrowing – we needed another £20,000.
At first they were a bit iffy but after they valued it at £345,000 – more than £100,000 than what we’d paid for it – they agreed.
It pushed our monthly payments up by £320 a month to £1,500 but it’s worth to get the work done and not pay nine per cent interest on the personal loans.
We’ve since opened all the rooms up to make it much more open plan, given it a lick of paint, bought new doors and putting in a brand new kitchen.
We’ve replaced the electric sockets to and replaced the flooring throughout. We haven’t finished yet though – there’s still more to do but we’re getting there.
How did it feel to get the keys and do you think you’ll stay there for long?
It was the most exciting feeling when we got the keys. It was scary too. I just thought, oh my god I have a house and I’m only 23.
I have to pay for it for the next 20 years but at the same time I was buzzing. I never imagined it would all happen so early.
One day we’d like to move back to London but it’s just not possible while the house prices are what they are.
For now, we’re just going to enjoy what we’ve got and get it finished and then who knows.
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