How I bought £300k house by selling my old clothes and giving up nights out and shopping for a year
SHOPAHOLIC Emily Jones gave up her favourite hobby for a year while she saved a £37,000 deposit for her first home.
Emily, who works for a bank, bought her two-bed home in Oxford a month ago for £299,995.
It took the first-time buyer three years to get the funds together, although she really buckled down on the saving in the last 12 months.
Emily cut living costs by moving back home with her mum following a back packing career break, paying £300 a month in rent, instead of privately renting.
She set up a direct debit on pay day for £600 to go straight into her savings account, a figure that rose to £1,000 a month in the year before she bought her house.
To do this, Emily stopped buying clothes and only saw her friends when they came over to her place instead of going out.
She also stopped treating herself to getting her nails done to save an extra £60 a month, and didn’t get her hair cut for six months.
The 30-year-old also flogged old clothes that she no longer wore in a homesale, making £200, in addition to the £600 she’d made selling more online.
But the new homeowner says it was all worth it to get her foot on the property ladder.
“Buying a place on my own meant I had to put down a bigger deposit,” Emily told The Sun, “which meant I had to save harder to get enough money together.
“It was hard giving so much up, just because you get used to a certain lifestyle, but now that I have my own house I can really see that it was so worth it.”
On top of her deposit, she also took out a Help to Buy equity loan of £59,999. The developers also put £10,000 towards the overall purchase price as an incentive.
We caught up with Emily for this week’s My First Home.
When did you buy your house and what’s it like?
I bought my home in Oxford in December last year so I’m still making it look like how I want it to.
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It’s a two-bed newbuild house with three bathrooms on a development near to where I grew up.
It’s an end of terrace so it’s semi-detached, with a small front garden and a bigger one around the back.
How did you afford to buy a place on your own?
Buying on my own meant that there was only one income being considered for the mortgage, which limited my options.
I did look at cheaper places in town, but they were all flats and needed a lot of work and I didn’t have the money to take on a renovation project.
I looked into the Help to Buy scheme after a friend told me about it. I realised that by taking out a 20 per cent loan from the government, I could afford a newer property that wouldn’t need any work doing to it.
It also meant that I was limited to buying a new build but that didn’t bother me. I like the fact that I’m the first here to put my mark on it.
Without the Help to Buy loan, I was looking at having to save for another few years.
To qualify for the scheme, I needed a 5 per cent deposit but because I was buying on my own mortgage lenders wanted more money upfront.
The house was on the market for £299,950 and I put down a 15 per cent deposit of £47,000.
This was made up of £37,000 of my savings and £10,000 from the developers.
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.
Help to Buy equity loan - The Government will lend you up to 20 per cent of the home's value - or 40 per cent in London - after you've put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property. You can no longer open a new account, but existing account holders have until December 1 2030 to claim the bonus.
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 per cent 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 per cent of the property but you're restricted to specific ones.
"First dibs" in London - London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative - A Government scheme that will see 200,000 new-build homes in England sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest on the website.
They offered me this incentive after I realised that my mortgage was going to be £10,000 short to be able to afford the house. I don’t have to pay this back.
I also took out a Help to Buy loan for 20 per cent of the property value worth £59,999 and a mortgage for £194,000.
I put down a £100 reservation fee when I registered my interest because I knew I had more than a 5 per cent deposit.
The actual process of getting a mortgage on my own wasn’t difficult as I used the broker recommended by the developers.
But I found that there no one would lend me more than four and a half times my salary and I was still £10,000 short for the full value of the house.
It meant I couldn’t afford the house and would need a bigger deposit, which could take me another year at least.
In this case, working with the brokers suggested by the developers really helped as they were able to easily communicate with each other and that’s when the builders offered to help me out with the incentive by putting the shortfall towards my deposit.
I’d say, definitely talk to the developers if you’re slightly short on the money because you may be able to get a deal.
I had been relying on a 25 per cent bonus on £7,000 worth of savings I had in a Help to Buy Isa but because the house I bought was over the £250,000 threshold I didn’t get it.
I didn't realise that this was a condition of the Isa so I had a last minute scramble to find and extra £1,500 to cover the legal fees.
I took out a five-year fixed-rate deal, which costs around £700 a month. My friend who’s renting a two-bed house in the same area pays around £1,000 a month.
Do you have a plan of how you’re going to pay back the Help to Buy loan?
The loan is interest-free for the first five years and as I’m on a five-year fixed-rate mortgage I think I might see if I can add it on then.
If I can’t, I’ll just pay it back when I come to sell the property.
How long did it take you to save £37,000 and was it hard?
I’ve always been a saver - it’s something I get from my mum who’s a seriously hard worker and who juggles three jobs.
I moved back in with my mum after I took a career break about five years ago to go travelling, instead of looking for somewhere to rent privately again so that I could save.
Back then I had about £7,000 in savings but I’d say I really buckled down and began saving much harder around three years ago.
To start with, I set up a standing order for £600 on pay day, which left me with £1,200 to pay for everything else, including the £300 I paid my mum in rent, running my car, travel to and from work and groceries.
I really upped my game in the last 12 months of saving. I literally didn’t spend anything on myself. I met my boyfriend around this time who lives in London so I only really spent money visiting him.
I hardly went out with friends, choosing instead to have them around my mum’s place.
I didn’t buy any clothes either, which was a big deal for me because I love shopping.
I increased the standing order to £1,000 a month and gave up the last few luxuries that I was still allowing myself.
I stopped getting my nails done to save £60 a month and I didn’t get my hair done for like six months. Now I think of that money as the gas and electricity bill.
I also sold loads of stuff on Facebook Marketplace and Gumtree. I sold a keyboard for £100 and made about £600 from selling old clothes and bags that I didn’t need any more.
I was supposed to complete in October but some issues with the water supply meant it was delayed until December, which I was relieved about because it gave me another month to save more cash.
In the final month, to help get enough money to cover the legal fees, I held a clothes sale at my house.
I put it on my Instagram and had a few people come round and buy my old stuff, which I’d hung up on a clothes rail in the living room. I made about £200 from doing this.
I also forgot that I’d been paying £30 a month into a share save scheme at work, which happened to mature a few months before buying my house. I cashed them in for £2,000.
It was really hard giving everything up just because you get used to certain things.
Netflix became my life for a while. I swear I’ve watched every series on there!
What was it like when you completed?
It was a great feeling but also so weird. I had the keys in my hand and was like, now what do I do?
I’d been to see the house a few times before so I knew what it looked like. I was so excited that it’s mine.
In terms of my savings, that felt like a shock. I’d been building up a stash for so long that it was an odd feeling when I had hardly anything left in my account.
I thought, oh right, I’m starting again now.
How did you pay to furnish it?
Having spent all of my money on buying the property, I’m slowly getting furniture to fill it.
My First Home
I already had a bed and I’d bought myself a sofa with some of the money I had left over.
Moving in at Christmas time was quite good as it meant I got a lot of Debenhams vouchers and my mum and nan clubbed together to buy me a washing machine.
I’ve currently got a £20 clothes rail that I bought from Groupon because I can’t afford a wardrobe but I’m getting there.