Single dad, 32, who rented for a decade reveals how he saved up a deposit on a £155k three-bed house for him and his daughter in two years
AFTER more than a decade in rented accommodation, Leigh Benwell thought he would never be able to save enough to set foot on the property ladder.
But thanks to the government-backed shared ownership scheme, he’s just picked up the keys to his new three-bed house in Grimsby, Lincolnshire, for him and his
four-year-old daughter.
Since the government scheme was launched in 2013, only 6 per cent of buyers have taken advantage of it, according to figures from .
But Leigh, 32, seized the opportunity for himself and his daughter because it allows you to buy anything from 25 per cent to 75 percent of the property, so your mortgage is less and the deposit is smaller.
The single dad-of-one hopes to increase his share in the house over time through "staircasing".
And while Which? Mortgage Advisors say that first-time buyers are saving for up to 10 years for a deposit, Leigh managed to do it in two while he rented at the same time.
Leigh, who works for the local council, moved into his new-build home only a few weeks ago and he reveals just how he did it in this week's instalment of the My First Home series.
What’s your new house like and how much did you pay?
It’s a new-build three bedroom end-of-terrace with a fenced off private garden.
It’s one of the first houses built in a new development, which is still being constructed.
The house was valued at £155,000 and I bought a 25 per cent stake in it.
How did you afford to buy the house?
I would have never, ever have got a house without the shared ownership scheme.
What is a shared ownership mortgage?
SHARED ownership mortgages are part of a government scheme which aims to assist lower income households and first time buyers purchase a property.
You can take out a mortgage for the share you own (usually between 25 per cent and 75 per cent), while paying rent on the other proportion.
Shared ownership is a scheme whereby you buy a portion of a property from a local authority or housing association – usually with the assistance of a mortgage – and rent the remaining part.
I think the minimum deposit that I would have needed to put down was £8,000 and, with costs on top, it’s not an amount I would have been able to get together.
I managed to save £2,000 over about two years, which was a struggle when my wages had to stretch to paying bills and rent too.
I budgeted each month and put bits of money away here and there, cutting out things like takeaways and going out.
How did you go about buying the house through shared ownership?
I had been wanting to buy for ages and was keeping an eye on the Housing Association website for when properties come up.
I had to make an application to show I was eligible for the scheme and then I was offered this house.
It was in the perfect place - I grew up in the area and all my family live around here.
The house is also close to my daughter’s school, close to work, and near where everything is going on.
What size deposit did you pay and what mortgage did you get?
I put down a deposit of £2,000, which was just over 5 per cent of the £38,587 mortgage.
I took out a five-year fixed-term mortgage at 6.74 per cent.
Were there any issues getting the mortgage?
Plenty. Being able to afford my own home was a bit of a struggle for several reasons.
I had some bad credit from a mobile phone contract that my ex-partner took out in my name, but I’ve managed to sort that out now.
Also, changing jobs recently also caused some problems and I was initially on a 12-month fixed-term contract until October.
Are you a first-time buyer who want to share tips on how you did it? Email us at [email protected] or call 0207 78 24516. Don't forget to join the for the latest tips on buying your first home.
I work for the local council dealing with parking services department but it was a completely new role.
I’d been there four months when I applied for the mortgage, but they are looking to make the position permanent.
How did you secure the finance?
I’d spoken to the high street banks, including Barclays, who I bank with.
For a shared ownership mortgage they wanted me to put down a 15 per cent deposit on whatever my share of the property would be, which made the deposit too
high.
I had a look around building societies as well, such as Mansfield BS.
They were willing to offer a 95 per cent mortgage with a 5 per cent deposit but they had an issue when it came to my employment situation.
I did a search online for mortgage lenders who did shared ownership mortgages and came across Together.
I was happy they did as they were able to offer me a mortgage.
The issue of my fixed-term contract came up again.
Together spoke to my employer and they sent a formal letter confirming that, from a business point of view, they needed the role to continue and planned to extend the role as a permanent contract.
They were happy with that and approved the loan.
How did you feel when you completed?
It’s a great feeling to know that I’ve got a settled home and have somewhere for my daughter, who comes to stay three nights a week.
It’s pretty much everything that we need, so we’re set up for a long time to come.
There’s a lot more space than we’d been used to. We’d been living in a small, two bedroom two-up, two-down for the past three to four years.
My daughter’s really excited that she can even have a second room as a toy room - she’s absolutely made up.
The combined mortgage payment and rent to the Housing Association totals £150 which is only £40 more than I paid in rent for a tiny two-bed house before I moved.
The extra £40 is well worth it for the space, not to mention the peace of mind I have a home of my own.
Do you need much for the house?
I’ve got furniture from renting unfurnished places. It would be nice to have some new things but I’ll slowly replace stuff when I can afford it.
MORE FOR FIRST-TIME BUYERS
The house didn’t come with any flooring so I had to carpet it straight away.
There are lots of bits and pieces on my list of things to buy.
With this heatwave, a paddling pool for my daughter is high on that list!
What was the hardest part about buying a house?
I found getting the mortgage quite a stressful process.
I’ve been paying rent for 10 years and never missed a payment. But banks are suspicious of a fixed-term contract.
I was relieved when I managed to get the mortgage sorted.
When do you think you’ll move again?
We won’t be moving any time soon.
The reason I wanted to buy my own place was so that we could actually settle in a house, with nobody telling us they are selling and we have to leave, so it’s just perfect.
I plan to extend my stake in the property over the next few years until I own it outright.
What are the pros and cons of Help To Buy: Shared Ownership?
HERE'S what you need to know about the government's shared ownership scheme, with advice from Amy Nettleton, from specialist Aster Group:
Pros
- You can often buy in a more expensive area because you only need to be able to affored between 25 per cent and 75 per cent of a home.
- It's felixible, so you can increase the amount that you own over time — called "staircasing". In some cases, you can eventually own all the property.
- You don't have to staircase if you don't want to. You can continue to pay rent on the portion that you don't own and unlike private renting, you won’t have a landlord who can ask you to move out at any time.
- It’s not just for young people or first-time buyers, it’s for anyone struggling to buy. The schemes are also popular with recent divorcees, those on single incomes and retirees.
- Your rent on the remaining share can often be cheaper than the local market rate.
Cons
- You don't own the whole property.
- Each year your housing association reviews your rent, which could go up.
- Staircasing can be pricey, especially if the value of the home rises.
- If you want to sell your home, the housing association has the right to find a buyer first, usually for 21 days.
- You'll have to buy where the shared ownership properties are, which may not be your preferred location.
- The properties are leasehold. So you own a lease for a fixed period, typically 99 to 125 years, and not the actual building.
- You also have to pay a service charge for the property, usually charged on a monthly basis. Check for extras like ground rent.
You should always get legal advice before buying a property.
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