IF you’re saving for a house and renting at the same time, seeing your money drain away each month can be disheartening.
But it didn’t stop Maria Padilla from putting away half of her monthly wage into savings to buy her £334,000 first home.
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Maria, an accountant, knew she would have to cut her outgoings so she could raise cash more quickly for a deposit.
But as she was paying £1,000 a month in rent for a studio flat in Ealing, London, she knew this would be a challenge.
So she went through her bills and identified where she could make savings.
She cut down on meals out, saving 3200 and cancelled her £50 a month gym membership.
She managed to save money on her commute as well during lockdown, as she worked from home and saved £150.
She also decided to move to a cheaper rented flat to free up extra cash for her savings.
She moved into a house share in Hammersmith in 2020, which reduced her rent payments by £300.
Asking for a pay rise at work also helped her to boost her savings.
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Making all these changes meant Maria was then able to put away around £1,500 to go towards her deposit – just over half of her new wage.
When Maria set her heart on buying her own property, she decided to use the government’s Help to Buy Scheme.
The government scheme gave budding buyers an equity loan and allowed them to put down a deposit of just 5%.
You can get up to 20% of the value of your property – or 40% if you live in London – under the scheme.
The loan is interest-free for the first five years – but bad news for any budding buyers, the scheme has now closed.
But there are other schemes available that will give you a helping hand up the property ladder.
The Help to Build scheme offers an equity loan to help you build a home or convert a previously commercial building.
Through the scheme, the government offers you a loan based on the estimated costs to buy a plot of land and build a home or buy a building to convert into a home.
The First Homes scheme means prospective first-time buyers in England can get homes at a 30% to 50% discounted rate compared to market price.
But, if the homeowner decides to sell the property down the line, the discount on the new value will be made available to any future buyer too.
Maria finally got the keys to her one-bedroom apartment in Hounslow in June 2021.
The Sun sat down with Maria 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 one-bedroom flat on the second floor of Barratt
London’s High Street Quarter development in Hounslow.
I have a lovely big bedroom and a separate large bathroom.
The kitchen and lounge are open plan and very spacious with underfloor heating.
There is also a large balcony that can be accessed from the living room and the bedroom.
It’s big enough to fit a hammock, furniture and different plants.
My flat is also south-west facing so I get to make the most of the sunshine in the afternoon.
How did you decide on location?
I was previously looking at properties in Ealing and Richmond Upon Thames, but they were way out of my budget, which was between £300,000 and £350,000.
Hounslow was a lot more affordable, but it still had a lot to offer.
It has good transport links and a busy high street with plenty of shops and good restaurants.
How much did you pay for it?
The flat was £334,000.
I took out a mortgage of £311,000 over 37 years with a fixed rate of 2.9% for five years.
My repayments are £600 a month.
I also applied applied for a Help to Buy equity loan, which helped me to afford my apartment.
It’s a scheme that helps first time buyers get on the property ladder with just a 5% deposit, even if they borrow enough for a mortgage.
The government will provide a loan of up to 40% of the value of the property if you live in London, otherwise you’ll get 20%.
There’s no interest added onto repayments in the first five years.
You have to buy a new-build in order to be eligible for the loan, but that suited me perfectly.
I received a loan of £133,600.
In the end, I ended up putting down a 5% deposit of £23,000.
How did you save for it?
When I first considered purchasing my own apartment, I quickly realised I didn’t have the means to save for a deposit while renting my studio apartment in Ealing.
I was paying around £1,000 a month in rent.
To help boost my savings, I moved into a house share in Hammersmith in 2020, which reduced my rent payments by around £300.
This was when I ramped up my other saving efforts to get my deposit together as quickly as possible.
The first thing I did was to ask for a pay rise at work.
I asked for my salary to be adjusted based on my achievements and the workload I had taken on and I was given a 30% pay rise.
To get my finances on track, I knew I needed to save around £1,500 a month – just over half of my new salary.
I was able to save to save around £300 a month by not eating out, which was made a lot easier because of lockdown.
Before this, I would pop out for lunch every day at work and eat out in the evening around three times a week.
Working from home also meant I could save money on my commute.
I was spending around £150 a month on tube travel, which I was instead able to put straight into my savings.
I also cancelled my Virgin Active gym membership, which was £50 a month.
When my phone contract came to an end, I shopped around and managed to find a cheaper deal with a different provider.
My bill went down from £30 to £20 a month – a saving of £10.
At the time, I was studying for my Association of Chartered Certified Accountants qualification at the time.
This meant I could apply for a student discount, which meant i could cut my monthly Spotify bill down from £9.99 to £5.99.
While this was a small saving, it all helped me to reach my target.
How did you afford to furnish it?
I bought a furniture package from the developer Barratt London for £5,000.
This included the majority of my home essentials, including a sofa, a wardrobe, bed, bedside tables and a coffee tables.
I had appliances like a kettle and a toaster already from when I lived in my studio apartment.
Do you have any advice for other first time buyers?
I think most people are afraid to go for their first home because it seems impossible.
I would definitely suggest seeking out mortgage advice, because it can help you to put things into perspective and make it seem more achievable.
I’m so happy that I invested and now own my apartment, rather than handing cash to a landlord.
One saver bought her first home by batch cooking and yellow sticker shopping to save cash.
Another saver bought her first home with her MUM because of sky-high house prices.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
This post first appeared on thesun.co.uk
