GETTING on the property ladder is no easy task, but Ryan Harris managed to bag his first home eight years earlier than planned.
CAD Engineer Ryan, 22, moved into his £265,000 two-bedroom apartment in Solihull, West Midlands, in January this year.
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He was living at his girlfriend’s family home when he decided to get serious about getting his own place last year.
Ryan managed to tuck away around £200 a week to build up the sum needed to get his own digs.
But saving for a deposit was made a lot easier when he came across the shared ownership scheme – a scheme for first-time buyers which allows you to buy with a lower deposit.
The scheme means that you co-own your home with a housing association – you buy a portion of the property and then pay rent on the part that you don’t own.
The scheme lets you put down a deposit of just 5% for properties – so it’s helpful for first-time buyers.
Buyers must purchase between 10% and 75% of the property to use the initiative, and they can then “staircase” – buy more shares in instalments – until they own 100% of it.
You can find local shared ownership properties on the Share to Buy website, or contact your local housing association.
One of the issues with shared ownership is that you don’t have as much freedom when it comes to selling your home, compared to if you hadn’t used the scheme.
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There are also fewer lenders offering shared ownership mortgages compared with standard ones.
But it can be a good alternative for first-time buyers needing a bit of support to get on the housing ladder.
After spotting the perfect shared ownership property just a stone’s throw away from his family home, Ryan’s parents gave him a £10,000 cash gift to help him reach the £17,000 he needed for his 10% deposit.
While this isn’t possible for everyone, some first-time buyers need a cash boost to get them over the finish line, especially if a property comes up sooner than expected.
Ryan owns 25% of his home and hopes to invest in more of the property once his girlfriend moves in with him when she finishes her University course.
We sat down with Ryan to find out how he went from being a saver to homeowner for The Sun’s My First Home series.
Tell me about your home
It’s a new build two-bedroom flat in Solihull.
I have a large open-plan kitchen and living room and a master bedroom with an en suite.
My spare bedroom and separate bathroom mean I have more flexibility.
My girlfriend is currently studying at university and is set to finish in June, so it means she can slot in a lot more nicely than if we had a one-bedroom apartment – it may have felt very cramped.
The extra space means we can have an office for working from home reasons, a room for guests to stay or a man cave for me, which I can’t imagine would go down too well with my girlfriend.
How did you decide on location?
My parents live just five minutes down the road so I knew the area really well.
I was keen to stay in the local area because it’s really convenient for work and in a great location with good transport links.
I haven’t had to change my commute to work which is great and it’s just been a really easy adjustment.
How much did you pay for it?
I used the shared ownership scheme to buy my home.
The house cost £265,000 and I own 25% of it.
I took out a shared ownership mortgage of around £40,000 for 40 years with a fixed rate of 5.7% for two years.
I decided to go for such a lengthy mortgage term to make my monthly payments more manageable.
My mortgage repayments are £240 and my rent is £420 a month, so I pay £660 in total.
My deposit was around 10% at £17,000 – you pay a deposit on the portion of the house that you are buying.
Why did you choose Shared Ownership?
It was my dad who initially found the shared ownership scheme – I’d never heard of it before and I felt lost until I came across it.
If I had decided to save for a full market value property, it would have meant staying at my parents for a lot longer, and perhaps even till I was 30.
But like most young people, I wanted to get on the property ladder as soon as I could to have my own freedom.
With shared ownership, I feel I have been able to afford a bigger space than if I was renting.
The biggest positive of the shared ownership scheme in my eyes is the ability to staircase too.
As I was able to purchase just a 25% share on a singular income, my girlfriend and I’s plan when she moves in is to use our double income to save for more shares, as our monthly payments are much lower than usual which means we can afford to do that.
How did you save for it?
I told myself that I would work hard and try and save as much money as possible for a deposit whilst still living with my parents.
I was lucky because this meant I didn’t have to pay any bills and could focus on saving.
I paid around £100 a month in rent from the age of 16 to my parents, and the same when I moved into my girlfriend’s family home during the pandemic.
But I still didn’t think I’d be able to save enough for a full market property on my own.
I’ve been saving since around the age of 16 when I got my first job straight from school.
At the time I wasn’t saving for anything in particular, but I did end up using the vast majority of my savings from this age to put towards my deposit.
I would have to dip in sometimes for things like an MOT, but I did try to be strict with myself.
I’m paid weekly so as soon as the money hit my account, I had a standing order that would go straight to my savings.
This was roughly £200 a week and around half of my income.
I saved £7,000 for my deposit and I was lucky enough to get a cash gift of £10,000.
We were very lucky to get this help and we know not everyone is as lucky.
The main reason I got this help was because I found the shared ownership property in the perfect location and it helped me to secure it and get myself on the ladder.
This meant I had enough in my savings to comfortably cover the deposit, as well as solicitors and mortgage broker fees.
How did you afford to furnish it?
The flat came with a brand-new fitted kitchen with included a dishwasher, fridge freezer and washing machine with a ten-year warranty.
This probably saved me around £1,000 on the cost of buying everything brand new.
I also brought my bed with me from home which saved me a few hundred pounds.
I still don’t have everything for the flat yet and I have been buying in stages to spread out the cost.
What’s your advice for other first-time buyers?
Look at what schemes are available to you.
When I first started looking I thought I was going to have to move out of the area which I really did not want to do.
Shared ownership means that people have a much better choice of where they want to live and what sort of property, no one should have to relocate out of an area they love due to affordability.
Meanwhile, we spoke to one couple we bought their £339,000 first home with a tiny 1% deposit.
Plus, one couple got a £67,000 discount on their dream home but they nearly lost it all over a simple mistake.
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