HOUSE THAT
I couldn’t have bought £456,000 four-bed house without an ‘underrated’ scheme – it really helps young people and parents
Watch our video on how Leanne went from being a saver to a homeowner
GETTING on the property ladder isn't easy, but Leanne Gem managed to bag her first home with a smaller deposit than she expected.
The 37-year-old, from Kent, paid £456,000 home with a £11,600 deposit thanks to an "underrated" property scheme.
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Account manager Leanne was keen to find a place for her and her son Rocco, 10, to settle down without having to find him a new school.
But with the average property price in Kent standing at £456,595, according to Rightmove, Leanne was expecting to need a deposit of almost £50,000.
Usually, buyers need to come up with 10% of the property value and take a mortgage out on the rest.
And getting a deposit together is often the biggest challenge on the journey to owning a home.
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But saving for a deposit was made a lot easier when Leanne came across the shared ownership scheme - 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.
It 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.
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You can find local shared ownership properties on the , or contact your local housing association.
But make sure you do your research first as there are some downsides.
One of the issues with shared ownership is that buying more of your property can be expensive and you're at a greater risk of getting into negative equity.
Plus, experts have warned about rising rents and service charges making it harder for owners to afford and sell on.
You also don't have as much freedom when it comes to selling your home, compared to if you hadn’t used the scheme.
The Sun's James Flanders explains how to find the best deal on your mortgage
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.
Leanne put down a 10% deposit of £11,600 for a 25% share in her property.
Leanne put around £200 every month into her savings, which she was able to do by sacrificing holidays and eating out.
We sat down with Leanne to discuss how she went from being a renter to homeowner for The Sun's My First Home series.
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% of the home's value - or 40% in London - after you've put down a 5% 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% 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% of the property but you're restricted to specific ones.
Mortgage guarantee scheme - The scheme opens to new 95% mortgages from April 19 2021. Applicants can buy their first home with a 5% deposit, it's eligible for homes up to £600,000.
Tell me about your house
It's a four-bedroom terraced house in a three-storey building in Swale, Kent.
Two of the bedrooms have ensuite bathrooms and I have a garage and a double driveway.
I wanted a big space for my son to play outside on the trampoline in the summer so the garden was a big selling point.
When I went to view the Shared Ownership properties with Hyde New Homes this was the one that stood out to me.
How did you decide on the location?
One of the main factors for choosing the location was so that my son could stay living near his school.
My house is now just five minutes away from his school which makes for an easy commute.
I know the area really well too, as we used to live about 20 minutes away. It feels safe and people are friendly.
It's on the outskirts, but not too far away from the main town centre.
How much was it?
I used the shared ownership scheme to buy my home.
The house cost £465,000 and I own 25% of it.
I took out a shared ownership mortgage of around £116,000 for 30 years with a fixed rate of 5% for five years.
My mortgage payments are £560 and I pay £916 in rent.
My deposit was 10% at £11,600 - you pay a deposit on the portion of the house that you are buying.
I do have the option of increasing my share in the property over time, but it’s not a huge concern for me right now.
How did you save for it?
I saved up for my deposit over two years.
I made sure to set up a direct debit that would send money straight from my current account to my savings account every month.
This amount was usually £200, but could vary from month to month depending on my circumstances.
I found this helpful because it meant that the money was transferred without me having to think about it.
My monthly outgoings were around £1,175 including my rent and other essential bills.
I used the cash-stuffing method to boost my savings as well.
The cash stuffing method is a budgeting system where you draw out a budget each week and any money left over you add to saving challenges.
For example, if you budgeted £80 for food each week and only spent £60 you then put the extra £20 towards a saving challenge like home improvements.
This method really helped me collect all my loose change to bulk up my savings by about £50 a week.
I also topped up my savings every time I got a bonus at work.
I would get a bonus of around £1,000 every six months and this would act as a nice boost towards my savings.
I had to cut out some luxuries too to keep up my savings habits, like eating out and going on holiday.
We would have gone on holiday more often but we didn't go for five years as I knew homeownership was my long-term goal.
But all this cash went towards my savings instead.
I also made sure I had a good credit score before I committed to buying the property as I knew it would affect the rate.
I did this by making sure I paid off my credit card in full every month.
How did you afford to furnish it?
The property was already decorated with carpets, wardrobes, a dishwasher, a washing machine, a fridge freezer and even an electric car charging unit so I didn’t need to worry about purchasing those.
I think this saved me from having to fork out an extra £4,000 for them brand new myself.
I brought a lot of furniture from my previous home, so I only needed to worry about purchasing some kitchen appliances like a kettle and toaster.
I ended up spending only a few hundred pounds on decorating and furnishing.
Do you have any advice for other first-time buyers?
Shared ownership is a great way to get your foot on the ladder, especially if you are young or a parent. It's such an underrated scheme.
I would probably have needed to put down a deposit of between £40,000 and £50,000 without it, and as a single parent, I would not have been able to afford that.
But I had to think about my son and make sure he had a good space to grow up, which is why I chose this scheme.
The whole process from start to finish was flawless.
Hyde New Homes set me up with a mortgage advisor and solicitor so you don't have to go through the hassle of finding them yourself.
READ MORE SUN STORIES
One woman has shared how she was able to save £16,000 for her deposit with a "last digit savings" trick.
Another has shared how she was able to boost her first home savings by £3,000 through a government scheme.
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