FIRST-TIME buyer Claire Lawson put her self on a strict takeaway ban and used a money saving app to help save up the deposit she needed to buy her first home.
Physiotherapist Claire, 34, bought her £312,000 flat with a £10,000 deposit in May last year using the Shared Ownership scheme.
3
3
3
Like many other first time buyers Claire, who earns £30,000 a year, needed to cut back on spending dramatically to help save up cash for a deposit.
She moved in with her parents, saving £600 a month on rent and took on extra work.
Claire also used a money saving app called MoneyBox. It rounds up your spare change when spending which means you can save up cash automatically and it helped Claire save up thousands of pounds.
She bought the property using a shared ownership scheme, meaning she owns 40% of the property and pays rent on the rest. Claire needed a minimum of 5% – £6,240 a year – saved up to purchase it.
But she decided to save up £10,000 to enable her to take out a smaller mortgage and cut down her monthly repayments. Many lenders will offer you a better rate if you have a larger deposit.
There are some potential risks you’ll need to consider if you want to use a shared ownership scheme.
One issue is that you don’t have as much freedom if you want to sell up.
Most read in Money
If you haven’t staircased to own 100% of the property, you may have to comply with rules set by the housing association before you sell up. For example, letting them try to sell it first.
You have to pay rent on the portion of the property you don’t own, and keep in mind that there will be service charges to pay.
Also, there’s always the risk that you’ll end up in negative equity, so you should do your own research to find out which method of buying is best suited to you.
We sat down with her to see how she went from being a saver to a homeowner for The Sun’s My First Home series.
Tell me about your home
It’s a two-bed flat in an old office building that has been converted into homes.
The kitchen and living room is open plan, and there’s one bathroom.
I’ve turned the second bedroom into a walk in wardrobe.
I’m on the ground floor, and while there’s no garden or balcony, there’s lots of nice parks nearby.
Each flat gets one car parking space on site.
How did you decide on location?
The flat is in Welwyn Garden City.
It’s close to work, and just half an hour on the train to London.
It’s close to the University of Hatfield, where I used to study – so I know the area well.
How much did you pay for it?
The flat was £312,000.
Usually, you’d have to put down a 10% deposit if you’re wanting to buy a property – but I put down just £10,000.
I used the shared ownership scheme to buy the flat.
You co-own your home with a housing association – I own 40% of it while Metropolitan Thames Valley Housing owns 60%.
I then pay rent to Metropolitan Thames Valley Housing for the portion they own – which is £250 a month.
I took out a £114,800 mortgage over a 34-year term on a two year fixed rate of 4.14%.
My mortgage repayments are £534 a month.
Why did you use Shared Ownership?
I used to think Shared Ownership would have been an expensive way of owning a home.
I thought that paying rent, a mortgage, and other costs like service charge to upkeep the building would end up tallying up to more than what I could afford.
Plus, I didn’t really understand how it worked – it seemed complicated.
But when I did my research into buying a home, I realised that I would never be able to afford the deposit to buy without using the scheme.
It meant I could buy somewhere a lot more quickly – and I can buy more shares in my house when I save up more cash.
There was also the option of using Help to Buy – but I thought it would take me longer to save for the deposit.
How did you save for it?
Up until August 2020, I was renting in a house share and spending £600 on a rent a month.
It meant I couldn’t put as much towards saving for the house – but luckily my parents said I could move in with them for a while.
I didn’t have to pay rent until May 2021, when I moved into my flat I bought, so it really helped to boost my savings.
Another way I saved more money was taking on extra shifts at work.
I would pick up an extra four shifts a month, which meant I got around £500 extra.
Cutting my spending on treats also helped me save more.
Putting myself on a takeaway ban for nearly a year helped me save £40 a week – roughly £160 a month.
And I cut down on takeaway coffees – I used to spend £15 a week, but only got coffees twice a week which cost me £6.
Making my own packed lunches helped me save too.
I would spend £30 on buying my lunch – but saved £20 a week buying it once a week as a treat and then made my own sandwiches.
A nifty money saving app helped me bag £3,000 in a year.
The MoneyBox app rounds up all the purchases you make to the nearest pound, and puts this extra money into your savings account.
So if I bought a coffee for £2.55, 45p would be put into my savings.
It was a useful app as I found I was saving without realising – it didn’t feel like I was ever short of money but I raised thousands of pounds.
How did you afford to furnish it?
I’ve still got lots of things to buy because I’m furnishing the flat in phases.
To cut down on costs, I shop in the Ikea sales to get furniture.
You can usually get 30% off in the sales, and I also get a discount of up to 20% because I’m a key worker.
I get the discount because I have a Blue Light Card – lots of high street shops and chains accept it, and you can sign up online quickly if you work for the NHS, emergency services, social care sector or the armed forces.
Advice for other first-time buyers?
Talk to people who have used different help schemes on offer to buy their home and make sure to do your research to see if it’s right for you.
I would have missed out on a great opportunity if I hadn’t looked into the Shared Ownership scheme properly.
When you’re saving up, just think that you’ll only be compromising on luxuries for a while.
The pay-off of owning your own home is worth it in the end.
We pay for your stories!
Do you have a story for The Sun Online Money team?
