Welcome to Home Truths, the tell-all series where homeowners and renters spill the beans on what really goes on behind the scenes when buying, moving or renting a property.
Moving story at a glance:
Ages: 58 and 54
Jobs: He's a company CEO, she's not working at present
Salary: £100K+
Buying: A five-bed house for £1m, plus a two-bedroom flat for £360,000
Deposit paid: £390,000 from part-exchange of Windsor flat
Amount borrowed: £800,000
Mortgage repayments: £2,000 a month
Income from show home: £15,000 a quarter
Why did you buy two properties?
We listed our house in Windsor for sale at £1.25m and because it's expensive, we knew it wasn’t going to sell so quickly.
We went to Winchester and saw the Cala Homes Kings Barton development and really liked the show home.
They told us about the 'Sale and Leaseback' scheme, where you buy a home and lease it back to the developer, so that they can use it as a show home.
It suited us because although it meant we couldn't move in for two or three years, during that time the developer would pay us rent while they showed prospective buyers around.
We had a mortgage-free buy-to-let property in Windsor worth £390,000, so we part-exchanged it for the Winchester show home, which cost £1m.
We got an interest-only mortgage on the rest which we aim to pay down when the Windsor house sells.
We thought it would take us several years to sell the Windsor house but it was snapped up quite quickly. At which point we realised we would soon be homeless, so we bought a two-bedroom flat across the road from the Winchester show home for £260,000, having topped up our mortgage to include that.
We completed the sale on the show home last June and then bought and moved into the flat in August. However, the sale on the Windsor home fell through after several months, so now it’s back on the market.
The idea is that once we’ve sold the Windsor house and moved into the Winchester show home, we’ll be able to pay off both mortgages and we’ll rent out the flat we’re living in now.
Why Winchester?
We wanted to be closer to the sea but we needed good connections into London and the Midlands for work.
We started doing day trips to scout for desirable locations to live and that’s how we found Winchester.
It’s a beautiful city and it reminded us of Windsor, yet it sits less than 20 minutes from Southampton, in the middle of beautiful countryside and undulating downs.
We were captivated and decided straightway it was the place for us.
What’s your new home like?
The show home is very Hampshire. It's red brick with dark wood cladding. It’s really beautiful and very typical of homes in the countryside around here.
We’ve taken our cats across the road to see the new garden, and it’s finished beautifully inside.
The flat is really nice too and there’s a big sense of community here as all of us are brand new to the neighbourhood and keen to get to know each other.
We’ve got a WhatsApp group and have been planting bulbs together in the grounds.
Obviously, some of the development is still in progress as it’ll be a while before it is finished, but you can already tell how nice it will be and during lockdown there’s been plenty to look at, with cranes and builders etc.
How did 'Sale and Leaseback' work?
We really liked the show home and were happy to wait. Cala Homes gave us a guarantee, so if any repairs need to be done before we move in, they’ll cover them.
I think the lease worked out at about 6% of the value of the home a year, so they pay us approximately £15,000 every three months, which works out at around £60,000 a year.
How did the part-exchange of the Windsor flat work?
It was very straightforward. It was a new-build, so Cala Homes had it independently valued and agreed to pay the market rate.
I’d really recommend part-exchange if you own a property outright because we didn’t have to faff around with showing people around and selling it.
How easy was it to get a mortgage?
Pretty straightforward because we had two properties which were paid off and we took out interest-only mortgages knowing that we would be able to repay them once the Windsor house has sold.
Any regrets?
It’s a shame the sale of the Windsor house fell through, but we did it this way because we knew it might take a while to sell. But other than that, no regrets.
We’re very happy in the flat and even if it takes another two years before we get into the show home, we’re very content.