I don't pay a penny on my mortgage repayments as a first-time buyer and live-in landlord

FIRST-TIME buyer Elliot Kemp doesn't pay a penny on his monthly mortgage repayments for his three-bed flat in London by renting out his two spare bedrooms.

The 29-year-old charges his two lodgers £1,200 each for their rooms, which include an en-suite, and this covers his £1,800 monthly repayments.

He even makes a healthy profit, around £3,000 a year, from being a landlord.

But paying for a big flat in the city came with a big price tag.

Elliot forked out a whopping £370,000 deposit for his first home – half the value of the flat – to secure his new-build flat when he bought it in February this year.

Originally he wasn't looking for such a large place.

When he got serious about buying his own place in March last year, he budgeted £500,000 for a two-bed flat using money he had already saved up over eight years.

But after his grandma tragically passed away months later after falling victim to the deadly Covid virus, Elliot inherited £200,000 – and realised he could buy somewhere bigger.

After crunching the numbers, Elliot worked out that bagging a three-bed flat and renting out the spare two bedrooms meant that his monthly mortgage repayments would be fully covered.

He reserved a three-bed flat in Whitechapel in November last year after finding a property that he "fell in love" with.

His mortgage repayments are £1,800 a month – exactly the same amount of money he was planning to pay for a flat-share before the pandemic hit and his house hunting journey began.

Elliot makes £80,000 a year, and was also given an extra £20,000 from his parents to put towards the cost of the deposit.

He moved in just days after completing in late February this year.

We caught up with Elliot for The Sun’s My First Home series to see how he’s fairing as a London landlord.

Are you a first-time buyer who want to share tips on how you did it? Email us at [email protected] or call 0207 78 24516. Don't forget to join the Sun Money's first-time buyer Facebook group for the latest tips on buying your first home.

Tell me about your home

It’s a three-bed apartment in a newly built block of flats in Whitechapel, a couple of minutes away from the tube station.

It is open plan, so the kitchen, living and dining area is all in one room.

There are three bathrooms – each lodger has their own bathroom, and I do too.

There’s a nice little balcony overlooking east London – it’s fantastic in the hot weather.

Why did you pick this location?

I was keen to pick a house in an up-and-coming area, so my house would increase in value.

The new tube line – the Elizabeth line – will be opening soon and central London is just two stops away – it’s one of the best connected areas in London.

I started looking at new build flats last year when I knew I wanted to buy my own place, and stumbled across this development three months into my house search.

It was still being built at the time by the developer, Mount Anveil – I fell in love with it and knew I wanted to buy one of their flats.

How much did you pay for it?

The house was £770,000 and I paid a 50% deposit – around £370,000 – to secure it.

One of the main reasons why I could afford put down such a big deposit for it was because my grandma passed away last summer due to Covid.

She left me around £200,000, so I put this money towards getting myself on the property ladder.

I put £100,000 of my own money that I had saved up over eight years towards the deposit, and my parents gave me £20,000 too.

I needed a big deposit as the banks would only lend me around £400,000 for a mortgage based on my salary.

But in the long-run, shelling out for a big deposit means I’m paying back less interest on my mortgage repayments which are £1,800 per month.

I took out a 25-year £410,000 mortgage at a fixed rate for five years.

How did you save for the deposit?

I had already spent eight years saving up before I decided it was the right time to buy last year.

I had saved around £60,000 by this point by living by the rule that I would put 10% of my salary away into my savings each month.

When I first graduated, I tucked away £200 each month, which gradually increased to up to £450 a month as I started to earn more.

Everything you need to know about being a live-in landlord

IF you’re happy to share your home with others, being a live-in landlord can be a great way to make some spare cash.

The extra money can be helpful taking the pressure off paying your mortgage repayments.

Here's everything you need to know about being a live-in landlord – from contracts to tax implications.


  • Live-in landlords don't have to pay tax on the rental income they get, as long as it's below £7,500
  • If you make more than £7,500, then you have to pay tax on your profityou can calculate this calculating what your rental income is minus any expenses, such as buildings insurance, council tax and ground rent charges
  • You need to tell HMRC if you're making more than £7,500, otherwise you could be chased for any backdated tax payments


  • You'll need to draw up contracts whenever you let a room to a new tenant
  • It will need to cover the terms and conditions of the tenant's stay, how much rent they need to pay and when
  • You'll also need to include what the roles and responsibilities are for you as a landlord and the tenant as well

References and credit checks

  • Make sure your tenant is who they say they are by doing a credit check on them and asking for references.
  • Ask for references from their employer, including information about their pay, as well from previous landlords
  • To do a credit check, you can get a reference from their bank

Putting the rent up

  • There aren't any rules to say how often you can increase the amount of rent for your tenants
  • But if you slap your tenant with big rent rises – or raise bills frequently – you might struggle to keep people on
  • To avoid any disagreements about rent, it's a good idea to set out when prices will rise and by how much

Repairs and damages to your home

  • As the landlord, you'll be responsible for repairing any wear-and-tear or faults with the house
  • However, it's best to outline exactly when the tenant will have to foot the bill for any damage caused in your contract
  • You should make it clear that money will be taken out of their deposit to repair any extensive damage if they're planning on leaving

Taking on extra work alongside my day job helped me boost my savings further – I made around £7,000 a year from doing consultancy jobs here and there.

When Covid hit, I knew it was the time to seriously start looking for my own place to live – so I made a few lifestyle changes to help me save thousands of pounds every month.

Around March last year, I was planning on moving into a flat share in central London which would cost me £1,800 a month.

But I pulled out of moving in at the last minute and moved into my parents house outside of Slough for 11 months during the pandemic.

So I saved £19,000 in total by not paying a big rent bill.

I was fortunate enough to have a job and keep working over the Covid crisis, so I was able to save up even more money on top of this.

I saved £200 a month by axing personal training sessions and quitting the gym after my membership froze due to Covid.

Every month I would usually spend £600 on going out, drinks and takeaways – but I cut this out too last year.

How do you afford your monthly mortgage repayments?

Originally, I wasn’t going to buy such a big flat.

I had worked out my budget, and was planning on buying a two-bed apartment for £500,000, renting out the spare room for a grand or so a month to help pay the mortgage.

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. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.

Help to Buy equity loan – The Government will lend you up to 20% of the home's value – or 40% in London – after you've put down a 5% 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% 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% of the property but you're restricted to specific ones.

Mortgage guarantee scheme – The scheme opens to new 95% mortgages from April 19 2021. Applicants can buy their first home with a 5% deposit, it's eligible for homes up to £600,000.

But when my grandma passed away and left me some money, I had another look at the numbers.

The mortgage repayments would roughly be the same if I bought a three-bed flat – but I could make more profit by renting out the two spare bedrooms.

My mortgage repayments are £1,800 per month, and I charge £1,200 in rent per person – they get their own bathroom too.

That means my monthly mortgage repayment is fully covered, leaving me with around £200 to £300 per month in profit after I’ve paid for all of the bills and council tax.

I’m making up to £3,600 profit per year – and I can recoup some of my savings that I’ve put into buying the flat.

How have you paid for furnishing it?

I had an “oops” moment when it came to furnishing my flat – when I reserved it in November, I didn’t factor in how much furniture would cost.

But I had a bit of time to save up for essential items such as beds and a sofa, because I completed three months later in February.

I've spread the cost of buying furniture, getting a number of items every month instead of splurging all in one go.

I’m still buying stuff now – the priority was getting the spare bedrooms furnished so I could get lodgers to move in as quickly as possible.

Were there any complications?

It took ages – four months – to get a mortgage. 

Every time I thought my bank would agree a loan, they would keep adding extra checks in.

I kept being told that this time would be the last bit of paperwork I needed to fill out – but more files just kept coming.

It was also nerve-wracking buying a flat off plan.

My flat was still being built when I reserved it in November. I only saw it for the first time just weeks before I completed the deal in February this year.

But it was exciting going through the process of seeing my flat being built and keeping tabs on the construction works.

What’s your advice to first-time buyers?

If you feel a bit overwhelmed at the thought of saving up more money for a deposit for a bigger house, I would go through the numbers before ruling this out.

If it’s feasible for you to buy a bigger flat, rent out the spare room and afford your mortgage repayments, then it might be an idea to look into becoming a landlord.

I’ve also learned a lot of new things becoming a landlord, including budgeting.

It was helpful to talk to people who are already renting out properties – so reach out for advice.

Here's how one savvy saver used the 50-30-20 savings method to help save for a deposit for her £146,000 first home.

Here's how Joely Harris, from the Isle of Wight, set up a bakery business to help save £10,000 for her first home.

If you're a key worker, you could get a 20% discount on your first home – here's how bank worker Bolu Sofoluwe did just that.

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