Diary of a first-time buyer

Despite a nail-biting race to buy their first home, Lucy Tobin finds a couple still keen to become property developers
Adam Smith and Katie Horn
Thinking bigger: Adam Smith and Katie Horn plan to convert the garage of their £190,000 maisonette to create a new kitchen and an extra bedroom. The property, which has a swimming pool, was a bargain because it was a repossession being sold by the bank
Adam Smith and his girlfriend Katie Horn have owned their first home, a two-bedroom maisonette in Streatham, for only a month but already they are dreaming of the riches they might make as property developers.

The couple are planning to stay in their flat for five years, using the time to extend it, then let it out as they buy another place. "We weren't put off by making our first property purchase, even though it was very stressful," says Adam.

The experience began when the couple decided they were "sick of giving a landlord £16,000 a year".

Adam, who is 26 and works in PR, and Katie, a backing singer, had been renting for three years. Family gifts and savings meant they had managed to build up £40,000.

"But we needed £55,000 for a decent deposit," says Adam. "So I had a conversation with my dad and my nan, who agreed to give us the extra £15,000."

With joint earnings of more than £60,000, the couple decided they could afford to spend £250,000. "Ideally, we would have wanted a house," says Adam. "Somewhere with a driveway, because Katie often comes back late from gigs, plus we wanted a garden, and to be near a station with easy access to my work in Farringdon."

When an agent showed them a ground-floor maisonette in Streatham on the market for £210,000, they initially weren't that interested, even though the property came with a swimming pool.

"But the deal seemed too good to ignore. The property had been repossessed, and the agent thought the bank would take £190,000 for a quick sale. We put in that offer and it was accepted." But that wasn't the end of the story.

"The bank said it was still going to put the flat up for auction two weeks later. I was worried about getting gazumped, and heard a property fund was looking at it because it was an ideal rental pad." So the pair wanted to organise a mortgage speedily.

"But we kept being turned down. I was really upset - between the two of us we earned a reasonable amount of money and were paying £1,400 a month in rent. A Northern Rock deal almost went through, but then we were rejected. Others said we just weren't eligible."

Eventually Santander offered a five-year, fixed mortgage at 4.49 per cent, with monthly repayments of about £750. "We agreed, and got a survey done as quickly as possible. Eventually the deal went through."

Having moved in on April Fool's Day, the pair now spend their spare time doing DIY. "We're planning on converting our garage into a kitchen/ diner, then turning the existing kitchen into another bedroom. In five years, we want to let this flat, move further out of London and start a family. By then I hope we'll be able to afford to start a bit of a property portfolio."

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