Buying a house

This is my experience buying a house in London.

Freehold vs leasehold

First thing to know is that there's Freehold, and Leasehold. Flats are almost always Leasehold. Leasehold is kind of like buying a flat in Sweden, except that the house is controlled by a faceless corporation that charges whatever service charges they feel like, have a bunch of restrictions, and no real incentive to do a good job.

You'll get a knock on the door from some guy saying he's there to change the smoke detectors, or inspect the pipes, or whatever.

Every Leasehold property has a Freeholder who does not care about you, who is the one who really owns the place.

My experience in Sweden is with renting and owning a flat in a BRF that encompassed just that building, so it was owned and managed by the people who actually live in the building.

You could put it like this: There are three parties involved in owning a flat:

1. You. You paid a lot of money to have exclusive right to your flat, be allowed to drill in walls and do all kinds of things inside your flat that a rental would not allow.

2. The owner of the building.

3. The people who manage the building.

In Sweden (2) is you and your neighbours. This means that for small houses (3) is often also you and your neighbours. Your voice is heard, and you get to vote about who actually manages the building.

For Leaseholds in the UK (2) is "The Freeholder". You rent your right to have your Leasehold. It costs a few thousand to renew that lease for a couple of decades. It's normally kept at around 100 years, but if it goes down below 80 it starts getting really expensive, and you may not be able to get a mortgage. And people won't want to buy it, so this could screw your investment.

Since the Freeholder isn't the collection of Leaseholders or inhabitants, and the Freeholders decide how the building is managed, the only selection criteria for building management is "as cheap as possible for the Freeholder", with no consideration at all for the Leaseholders.

So in short: get a Freehold if you can.

Solicitor

In Sweden the only third party in buying a house is the estate agent. In the UK aside from the estate agent both you and the seller have a solicitor. All communication between buyer and seller goes via these lawyers.

You probably have to chase the solicitor, to make sure they actually do what they're supposed to do. E.g. when I contacted the solicitor asking if some final paperwork is done (after waiting weeks), then coincidentally it "just" arrived, and they'll send it via post today. This is apparently normal, and one cannot just wait and assume the job will be done.

We had to change solicitor. We originally chose the one recommended by the estate agent, but turns out they were not registered in the system for our chosen mortgage provider. And they would not be able to register, either. So we had to switch.

Our first solicitor had a different issue, too. Because of covid this was all done over the phone, email, and post. We were going to send a copy of basically all our IDs and financial information, so we wanted to check up on the lawyer. But we couldn't find them on the SRA website. SRA is where all solicitors are registered. The phone number and company of a person with the name of our solicitor did not match. Turned out to be a screwup at the SRA (Solicitor's Regulatory Authority).

How bidding works

In Sweden everything is an auction, and you can see the highest bid. The UK has auctions, but most are listed for a price. based on that price you can put in an offer, that's higher or lower. That bid is then accepted or not.

Mortgage

Barclays

Their website says really low interest rate, so we tried to go with them. Then later in the process they bump the rate and are no longer the cheapest. So we ghost them.

Three separate people said that we could just drop by to have our IDs checked. So we go there. Nope, we need an appointment. WTF? Appointment for 9am Friday .

Called Barclays. Again after waiting in a queue for 30 minutes a lady routed us into the void after speaking incoherently.

At least we got confirmation that my girlfriend doesn’t need to confirm her ID since she's a prior customer.

The lady on hte phone says she’ll call branch managers and will have them call us, since she can’t access their diaries. Sigh.

Got call from “Dean”, who gave his number and (due to Covid) said for us to call when we're outside, and we get our IDs checked.

Habito, a mortgage broker

We used habito to find the best deal. Turned out to be Platform. Aside from Platform taking 15 working days (because covid) to even look at our application. The delay coused the seller to get worried, despite us keeping them up to date on the status.

Survey

After getting your offer accepted you schedule (and pay for) a survey. This was the most (only) problem-free third party. The guy showed up on time, texted status updates, and quickly prepared a survey document about any problems. The only annoyance is that we're not allowed to share anything about the survey with anyone. This seems like a scam so that if the purchase falls through another buyer will have to do another survey, and potentially pay the same person to go and inspect the same property again.

Exchange and completion

The two most key events are "exchange" and "completion".

"Exchange" is when contracts are signed, and a 10% deposit is paid. If the purchase falls through then that money is gone.

Because after the exchange the buyer is legally obligated to buy the property, the bank requires that from this day a building insurance is taken out (would not apply to flats).

So between exchange and completion you're in a strange situation where you have an insurance on a property you don't yet have access to. "Completion" is when keys are handed off.

10 Years in London

It's interesting how things change when you're not looking. Last time I was in Sweden was in 2018, and it was easy to see the obvious changes, like buildings, and road changes. The big road to Kista was way different, as was Norrtull. And Odenplan is way more connected with its new commuter trains.

But there are less visible changes too, that make it seem less like home and more foreign. A new way to pay for public transport, with weird nonintuitive terms that I'm not used to. Imagine being asked "do you have a travel purse? (reskassa)". Huh? "The standard is 6, do you want that?" Standard what? 6 what? Because I didn't understand the guy actually thought I didn't speak Swedish (even though I'd spoken in complete sentences already).

So I feel like a bit of a foreigner.

It doesn't help that my personal ID number is no longer in the public register (it's still valid, just not in the public version of the register, SPAR), so companies call it "invalid". And my bank (SEB) said they will no longer be able to let me buy investments within their platform. I don't have to sell what I have, but I can't trade or buy anymore.

Some online stores don't accept that my Swish phone number is a UK one (but it does work, I've sent and received money with it), and paying with Bank ID doesn't work if my personal ID number is "invalid".

Several companies where I'm an existing customer don't support me changing my mailing/billing address in their system, so I have to contact support for them to manually change it. At least Binero, SEB, and Loopia. Also Skatteverket requires a letter to be sent. That's right, not everything is digital in Sweden. I think Avanza even needed a "proof of address" such as bank statement. I'd never heard of that in Sweden before.

Avanza will let me continue even after the UK leaves the EU fully (but would not let me create a new account if I didn't already have it), so that's good, at least.

A different kind of nanny state

I've noticed a pattern in how Sweden and UK handle differences in income differently.

Sweden has income tax, and that's pretty much it. There's four levels:

• Anything less than X is tax free
• Above that, anything less than Y is taxed at (about) 30%
• Above that, anything less than Z is taxed at (about) 50%
• Above that it's all taxed at (about) 55%

(details not important for these purposes)

Simple, right? I've made a spreadsheet that manages to compare UK to Sweden taxes, and after the complication of National Insurance (NI) tax being separated from income tax, and regressive, it's pretty simple.

The UK has very similar structure (though with lower percentages), but doesn't stop there. Unlike Sweden there are other limits where the UK takes away tax breaks and benefits as income increases. This becomes de facto progressive taxes (don't read me wrong, I'm not against progressive taxes), but added in a way that makes it very hard to get a real number for "how much more will I get in pocket if my income increases by X?" or "What is my net tax percentage at income X?".

Examples:

• At an undefined low income you can queue for council housing (I don't know much about this)
• At an undefined low income you can get a discount on your council tax (Sweden doesn't have council tax at all)
• If you earn more than £45k then any capital gains is taxed at 20% instead of 10% (with complicated formula to not make in-pocket go backwards)
• If either parent of a child earns more than £50k the child benefits start going away, to be completely gone at £60k. This is taken back as income tax.
• Between £100k and £120k the tax-free allowance disappears
• That's £11k * 40% = £4'400
• Between £150k and £210k the annual pension allowance decreases from £40k to £10k
• This is a tax increase of £30k * 47% = £14'100

Sweden has a bunch of ceilings, but things aren't taken away at higher incomes.

So which is better? I don't know. UK has the drawback that it's harder to get a clear answer (and you only find out about new rules when your salary increases to that limit), so tax system transparency is worse, and doing your taxes is harder.

Sweden has the drawback that e.g. there's no reason to give child benefits to someone earning a million SEK per year.

Bottom line though is that it's way harder than I expected to compare cost of living, or even tax rates, between countries. Maybe I was being naive.

Five years in London

As of today I've lived in London for five years. It seems like a good time for some kind of retrospective.

I've gone back to Sweden about once a year. I appreciate the architecture of Stockholm much more now. I feel like a foreigner (I guess it helps that in Sweden I stay in someone's spare bedroom and don't have my own place). I say silly things in Swedish (I've been Dolphed).

I appreciate speaking two languages fluently, in that some expressions that come naturally in one language are much harder to express in others. And language does steer thoughts, to some degree.

Take "övervakning" (surveillance) as an example. In English it sounds like "survey", but in Swedish it's closer to "over watching" (well, not really, but the word "over" is part of it). As in "watching from above". A co-worker found a sign in German that said "videoüberwachung" funny, because to him it sounded like it meant "videos are being super-watched", which did not occur to me as a Swedish and partial German-speaker.

Taxes. OMG Taxes. I had to do a self-assessment this year, which means I couldn't just squint at what HMRC sent me and go "uh... yeah that sounds about right" and do nothing. I had to actually run the numbers myself this year. So I got an accountant. The accountant was expensive. The back was taxes three times as expensive. But at least I've moved my tax liability for my savings and investments in Sweden to instead be in the UK. I am not a tax adviser, and I barely understand the annotated filled-in tax form my accountant gave me, but this appears to be beneficial to me.

What's still different about London:

• No mobile coverage on the tube. This is still crazy.
• Bank websites are still shockingly stuck in the past.
• I don't feel like I've fully internalized the value of the British pound. It doesn't help that all the prices are different here (food is cheaper, rent much more expensive) and that I'm making much more money here than I did in Sweden.
• Weekly scam phone calls: PPI protection and "We've been told you had an accident in the last few months, is that right?"
• Ok, so PPI protection is not a scam, but they won't stop calling even if you tell them "I was not in the country when this settlement happened. This does not apply to me. Please take me off your list."
• If you get the "accident" one, just ask "what address or name do you have on file for this accident?". They will hang up on you if you ask that.

What's different about Sweden:

• Why does a country of only ~10M people have their own language?
• I miss snow. Don't let the locals fool you, they don't really have winter and don't actually get any snow.
• "What do they know of England, who only England know" applies to Sweden too.
• Jantelagen is stupid.

My plans now:

• Get Permanent Residence Card. You can get this after 5 years and holding it for a year is a prerequisite for applying for citizenship. (if you are non-EU citizen you instead apply for Indefinite Leave to Stay (ILS).
• Continuing to live and work here.

The most untranslatable Swedish word

No, it's not "lagom".

It's "tjuvträna".

It's harder to explain in the UK than Cheeky Nandos is to explain to an American.

USD bank account

I have some stock priced in USD that incur a fixed currency conversion fee per transaction, and a currency conversion fee. If a stock is priced at $500 with a $25 fixed fee plus 1.6% conversion fee it's not really a good idea to sell one stock at a time, and even then there's the conversion fee.

So I called HSBC UK and asked them if I could open a USD account. Turns out they've discontinued that service in the UK, but that perhaps I could open a USD account with them in the US. Fine, doesn't matter for me where the account is, I guess.

Nope, can't do that, the next person said. I don't work in the US, so that's out.

Next they offered to open a USD offshore account with HSBC expat. We could walk through the application, and that will take about 40 minutes where they'll ask me about my income, my monthly expenses, etc.. I'll also have to come in to a branch office and show passport, UK driving license, and recent bank statement.

That makes some amount of sense... if I weren't already an HSBC customer, and they didn't already have all this on file for me already, and if I hadn't come in just last week to have them scan my driving license in addition to them already having my passport on file. But I am, and they do, and I did, and they do.

Ah, but HSBC is not the same as HSBC Expat.

Can't you copy-paste that info with my consent? -- No

Ugh. Can I do this online? Yes, I can print the form, fill it in, and come in with it and all my documents.

So the bank statement, I will get a bank statement from HSBC and then immediately hand it back to HSBC? -- Yes

Fine. HSBC is stupid, but fine.

Filling in the form I have to check a box saying I'm aware of IRS FATCA and that it either doesn't apply to me or that I've done the right things and have the right paperwork if it does. Uh... this could make my tax return much more complicated.

So I call my Swedish bank, SEB. Yeah, sure, it'll cost 300 SEK. They'll send me a thing I need to sign and then I'm all set.

Sounds painless. To be continued...

My new favourite UK hobby

My new favourite UK hobby is filling out forms in proper ISO 8601 format, and watching them struggle to understand it. (honestly people, 2014-12-24, it's not that hard!)

I feel a bit like Václav Havel when I do this.

References:

• ISO 8601 on Wikipedia
• xkcd.com/1179/

(there, a blog post done in 2014)