FIRST-TIME buyers are finding it more difficult than ever to get on the property ladder, but it’s possible if you’re willing to be flexible.
Joe Mascari decided to go ahead and buy a £567,500 apartment in London with his colleague Danielle Whiteman.
Joe, 23, and Danielle, 27, found that they were priced out of the sort of homes they wanted and that were within their budget.
So they decided to pool their money together so they could get onto the property ladder quicker.
But even after joining forces, they found that they didn’t like many of the developments in the budget, or that many were simply unaffordable.
About a month into their search, they started seeing adverts for shared ownership – 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.
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 saving hard and getting a part-time job while he was at University, Joe was able to split the £40,000 deposit equally with Danielle.
Joe had a part-time bar job and worked restocking shelves at Waitrose during the coronavirus pandemic to boost his savings.
As a first-time buyer, he also made the most of the government’s Help to Buy scheme.
Joe and Danielle, who are both content producers, moved into their flat in May this year.
It has communal facilities such as a cinema room with a bar, a gym and a space for people who work from home.
The Sun picked Joe’s brains on how he found becoming a homeowner alongside his colleague Danielle for The Sun’s My First Home series.
Tell me about your home
It is a two-bedroom apartment in Whitechapel, East London.
The property is open plan, with a kitchen living room and a balcony.
We also have access to an on-site gym as well as a cinema space, which you can book for hosting movie nights with friends.
The cost of this all comes within our monthly service charge of £308.
We don’t have car parking spaces because we don’t own the whole property ourselves.
How did you decide on location?
We both work in Shoreditch and grew up in London so we knew that we didn’t want to move too far out.
The area is well-connected, with good access to public transport.
It only takes us 20 minutes to get to work from our home.
We also thought that the building seemed quite unique and had some character, which we really liked.
Whitechapel is also quite a buzzing place to live, and we both have quite active social lives.
How much did you pay for it?
We used the shared ownership scheme to buy our home.
It means that you can 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 to your housing association.
The apartment cost £567,500, and we own 35% of it.
We took out a shared ownership mortgage of £158,625, at a four-year fixed rate of 2.24% for 40 years.
Our deposit was 7% at £40,000 – you pay a deposit on the portion of the house that you are buying.
I paid £25,000, while Danielle contributed the other £15,000.
Our rent stands at £657.95 and our monthly mortgage is £500.63.
We split these costs 50/50.
I also opened a Help to Buy ISA just before I went to university.
By the time I was ready to buy, I had saved up around £15,000.
The bonus from the Help to Buy was around £1,381.48.
How did you save for it?
I opened up a Help To Buy Isa when I was 18, and just before I went to university.
I had a part-time job working in a bar, and made sure I was putting away £200 from that into my ISA.
At the start of my second year, I got a part-time job re-stocking shelves overnight at Waitrose.
By the time I graduated, I had saved around £7,000 – which I split between my Isa and my savings account.
After university, I moved back home and started paying rent of around £150 a month.
My mum then put this money into a savings account for me, which she then gave me back when I came to put down the deposit.
Over the course of 18 months, this added up to around £2,700.
I also limited myself to spending around £400 a month, after paying rent.
I did this by withdrawing £100 in cash at the beginning of the week, and only spending out of that.
This was actually really helpful, because I could literally see how much money I was spending, and how much I had left.
I also left my debit card at home on nights out so I wasn’t tempted to spend more than the cash in my pocket.
I also got £10,000 in inheritance when my dad died, which I put towards the deposit.
How did you afford to furnish it?
Danielle and I knew that we needed to save beyond the deposit to afford the furniture that we wanted.
We split most of the items 50/50, apart from the furniture we have in our rooms.
I have been buying everything in stages, and I still have some stuff left to get.
What advice would you give to other first-time buyers?
It’s a good idea to get used to being without the money you will be spending on your mortgage.
You could do this by working out what your monthly mortgage payments will be, and setting that money aside.
This will get you used to your new budget and you can see if it is feasible for you.
Here’s how one saver put themselves on a takeaway ban and used a money-saving app to buy a £312,000 flat.
One couple used the snowball method to clear their £26,000 debt and buy their first home.
Here’s how one homeowner saved half their wages while renting to buy their £315,000 first home.
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