How I bought an £80k flat on £10k a year salary after getting rejected for a mortgage
IT was second time lucky for part-time blogger Emma Jackson when it came to buying her first home.
The savvy saver, 25, bought a £80,000 one-bed flat in Sheffield in September 2019 after her first attempt at getting a mortgage failed.
She saved up a sizeable £36,000 deposit in just five years by taking on jobs as a babysitter, lifeguard, personal trainer and cleaner while studying at university.
After graduating in 2017, Emma then got a part time job at Sheffield Hallam University as a campaigns and democracy leader, which she still does, earning £10,500 a year working 17.5 hours a week.
In her spare time, Emma blogged about how she makes extra cash on , and now turns a profit running the site.
This meant she eventually had enough saved to put down a 45 per cent deposit she needed because of her low salary.
But despite a mortgage broker telling her that she was eligible, Emma's loan application was rejected due to the short lease on the flat.
The delay meant that she risked missing out on the property entirely but luckily the seller was willing to wait.
She then switched to a different broker who found her a deal that she was accepted for.
Emma spoke to My First Home about the ups and downs of buying her one-bed property.
What is the flat like?
It is in a block of 300 modern flats built in 2004 and I'm on the third floor.
The great thing is that it has a balcony that lets in lots of light and overlooks the hills of Sheffield.
The flat is also really close to the city centre and I can walk to everything.
It has a separate kitchen and bathroom with a shower and then a living room off the hallway.
There is a sliding door off the hallway through which is the bedroom, and that means I can have a bigger space if I open the doors. That was a real selling point for me.
How did you afford to buy on your own?
I lived at home through uni, as I was studying locally at Sheffield Hallam University, and paid £30 a week for board.
I spent about £100 a month on food and around £80 a month on socialising.
I'm not a big drinker; I tend to socialise with my friends at their house with a cup of tea and if we go out for a meal I always order tap water and look for discounts.
Something I also do to pay for meals and date nights is to mystery shop using a site called .
I also hardly ever buy brand new clothes, I tend to buy them secondhand or from the app . If I ever buy anything I use cashback sites and I have always made my own lunches rather than buying them.
Plus, I worked about 30 hours a week the whole way through university while doing my BSc Sports Development degree and was always stashing money away.
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I earned more money than I needed because I lived below my means. I managed to save around £200 to £500 a month during university.
In my second year of university I was earning enough as a personal trainer - around £8.50 an hour in a local gym - and as a lifeguard - around £8 a hour to make £8,000 a year.
I earned the same in third year and then, when I did my MA in Sociology, I made about £4,000.
By then I was also doing babysitting once a week for £20, odd cleaning jobs, and sports coaching for three hours a week earning £10 an hour - on the side.
After graduating I got my current part-time job at Sheffield Hallam University, while continuing to make money from side hustles and blogging about them.
I moved into a rented flat with my ex-partner around the same time and we were paying £550 in rent between us.
With bills and disposable income included my outgoings were £475 so I was still able to save up to £500 a month.
When we split up I moved back into my parents' house in Sheffield for five months.
In total, it took me two years from graduating to save up the extra cash, during which time I was also spending around one to two hours a day mystery shopping, filling in online surveys, and making money from apps.
This earned me an extra £2,000 on top of my salary, and I made about £200 a year alone from online surveys from companies such as , and and used this to buy birthday and Christmas presents.
Then the second year of my blog I made £2,500 from it and another £2,500 from other side hustles.
This past year, the blog has really taken off and I have made £10,000 from sponsored posts, adverts and content writing work - and it only cost me £18 to set-up.
I have continued saving and basically any money I have made from the blog has gone straight into my savings with a big boost in the past year.
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. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
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.
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.
By the time I came to buy I had £30,000 in savings, plus £6,000 in my Help to Buy Isa - £4,800 plus the £1,200 government bonus - and I had made enough money from my blog to pay the £1,200 solicitor fees.
Did you have any problems getting a mortgage?
Yes. It was really hard to get a mortgage and I thought I wasn't going to get the flat after I made an offer on it.
Because I am only employed part-time and didn't have enough years of self-employed earnings I could only get a mortgage for £44,000 or below.
This really restricted what I could buy even though I had £36,000 in savings.
I was also offered a really good mortgage deal and then the lender pulled out because it was worried the relatively short lease at 83 years meant it would struggle to sell the flat if it got repossessed.
Extending the lease is also pricier the lower it goes, although this isn't something I'm worried about right now.
So I had to go to a different mortgage broker and start the whole process again.
From April to August last year I was trying to get a mortgage in principle and kept getting rejected. Luckily my second broker was able to sort it quickly and I was in the property within six weeks as there was no chain.
How much do you pay each month?
NatWest ended-up being the only lender that would give me a mortgage on the remaining £44,000 and all it would offer me was 25 years. It is a two year fixed rate at 2.16 per cent.
The payments are only £190 a month which is way lower than what I can afford.
I am already overpaying the maximum amount I can on top, which is 10 per cent of the mortgage - £4,400 a year.
As it's a leasehold property I also pay £300 a year ground rent and an £800 annual service charge.
How did you afford to furnish it?
I was really lucky because the previous owner was a landlord and just wanted to sell it quickly. They left me all the white goods and a lot of furniture.
I got a dishwasher, cooker, fridge, washing machine, bed, mattress, dining table, bedside table and settee all for free.
I had all my crockery and cutlery from living in my flat previously and I got given a new settee from my brother's girlfriend's mum, so I actually sold the existing settee for £25.
The only thing I really bought was a £200 television.
Are you still managing to save money?
Yes. I am saving everything I make from the blog which is about £1,000 a month now.
My outgoings for mortgage, bills, food and disposable income is around £700 a month so it means I can still save lots.
One of my best savings is actually my broadband deal - it’s only £16 a month but I also got £65 cashback; meaning I basically got four months of free broadband.
I also did this with my phone contract – it costs £8 a month for a 12-month contract and I got £40 cashback.
What did it feel like to pick up the keys?
I was really chuffed because I thought owning my own home wasn't going to happen.
The kind of flats I could afford weren't very nice, my first mortgage got rejected and it was all very frustrating.
My First Home
So I was absolutely thrilled when I got the keys.
What is your advice to other first time buyers?
This all came from me working hard. I was doing minimum wage jobs and 16-hour shifts as a lifeguard.
Do the overtime, work hard and save money everywhere.