We used shared ownership scheme to buy £246k three-bed house at 21

A COUPLE from Exeter saved for 18 months to buy their £245,500 three-bed house by the time they both turned 21 - but the saving game isn’t over yet.

That’s because a year after getting the keys to their first home, Megan Cross and her partner Jake, both 22, bought their home through the shared ownership scheme.

The couple own a 50 per cent share in the home, meaning they pay rent to a housing association that owns the other half.

Megan, a property salesperson, and Jake, an insulation installer, saved around £600 a month to be able to afford the £7,000 deposit for their home.

Now they’re tucking away £300 a month in the hope that they’ll be able to afford to buy the remaining share next year.

But staircasing - the process of buying more shares in a shared ownership property - can be expensive.

The won’t be entitled to the first-time buyer stamp duty relief again, even though the property is still under the threshold, because it will count as a second purchase.

They also face forking out thousands of pounds for a second round of legal and solicitor fees.

But despite this, the couple say it’s worth it to get on the property ladder in their early twenties, and see it as more of an investment than buying a smaller home outright.

We sat down with Megan, a property salesperson, for this week’s My First Home.

What’s your new home like?

It’s a three-bed house on a brand new cul-de-sac in Pinhoe, Exeter. The downstairs is all open plan, and it opens out into the garden.

Upstairs, there’s the master bedroom and bathroom - and then two spare bedrooms. One is a double and the other is a single room.

It’s perfect for us. We live with our three cats and we really love it.

We’ve actually just redecorated again and got a new sofa, as we still had some savings leftover - and we didn’t really like what we’d done before.

I don’t have much of an eye for design but we do love it now though.

How did you save enough for the deposit?

We were really lucky because we were both still living with our parents when we started saving.

We knew that we wanted to move out but I didn’t want to rent anywhere as I see it as dead money.

I left myself with £600 a month to live off, which included the £150 a month I paid my parents for rent.

It meant I could put the other half of my pay check - around £600 a month - into savings.

I’d never be able to save that much now.

I put some of my savings - the maximum £200 - in a Help to Buy Isa for 18 months while Jack put money into one for six months.

It meant that in total we got a top-up of £1,200 from the government which helped pay for the solicitors fees.

We were really lucky that we didn’t have to give up too much - I was still able to go out on weekends and get my nails done every now and again.

Living at home meant I didn’t have any real outgoings, like a car that I needed to pay for or any big bills.

We set ourselves a goal of two years. We probably could have done it sooner if we’d given up more but we didn’t want to be miserable while we saved.

Why did you decide to go for a shared ownership property?

We probably could have afforded to buy a one- or two-bed flat outright with the deposit we had.

But we thought that buying somewhere smaller would mean that we would have sold it after a few years when we wanted to upsize.

We felt we would get more from buying a share in the property and staircasing at a later date when we can afford to.

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This is when you buy a bigger share in the property from the housing association.

This way, we are in a home that we will hopefully stay in for quite a few years - and we don’t have to worry about selling and saving to buy somewhere bigger.

We have already both had promotions at work and we are saving up again - around £300 a month - in the hope of buying the remaining shares next year when our mortgage deal is up.

We’re hoping that the equity we will have in the house by then, plus our savings and bigger salaries, will be enough for us to take out a bigger mortgage to buy the rest of the shares.

But of course, staircasing means that we’ll have to pay stamp duty on the portion that we buy because we’re technically no longer first-time buyers.

We’re not sure how much it will be as the house will have to be revalued but it could be a few thousand pounds.

We’ll also have to pay all of the legal fees again too, like solicitors charges and updating documents like Land Registry.

Were there any problems during the buying process?

There was a delay to us moving in because the house wasn’t actually ready as soon as they thought it would be.

We had or offer accepted in December and were expecting to move in in March but the house wasn’t finished being built until July.

It was a really stressful time actually we were lucky that we lived with our parents and could stay there a bit longer. It could have been a nightmare if we’d been renting somewhere.

To add to the stress levels, we hadn’t even seen the house before moving in as it was new build. We’d only seen the plans and had no idea if we’d like the finished product.

We hadn’t viewed any other properties either before putting in an offer for this house - so it was a bit of a gamble.

It definitely paid off though. We are so happy and we really love it.