We bought our £339,000 first home with a tiny 1% deposit thanks to a little-known scheme – how you can too
FIRST-TIME buyers are finding it harder to get on the property ladder, but Stan and Eleonora bagged their home with just a 1% deposit.
Letting agent Stan Chamberlin and executive assistant Eleonora D’aietti moved into their one-bedroom flat in Essex in June.
The couple said they didn't have homeownership on their mind when they came across a TikTok about the Save to Buy Scheme.
Property developer Fairview has launched the scheme to help those who otherwise could not afford to buy.
The scheme allows first-time buyers to save for their final deposit via fixed monthly payments while living in their new home.
You only need a 1% deposit to get started, then once you’ve saved the required amount, you can apply for a mortgage to buy your home.
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Be aware that the offer is only available on limited plots in and around London at the moment. It will run until December 2023.
The couple pay a fixed amount of £1,590 a month - just £400 more than they were paying in rent - towards their deposit.
They hope to have saved a 5% deposit of £16,950 by November and complete on the sale of their home.
If a buyer was to pull out of the sale, they don't incur any additional costs but all of the monthly payments they've made so far would be kept by Fairview as rent.
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If Fairview's scheme isn't helpful to you, there are other schemes available that will give you a helping hand up the property ladder.
Buyers with a small deposit of 5% can use the government’s mortgage guarantee scheme to get a 95% loan-to-value (LTV) mortgage.
The initiative was originally due to finish at the end of 2022 but has been extended by another year.
You now have until December 31, 2023, to take advantage.
First-time buyers can use the scheme, as well as home movers, but the property you want to buy must be below £600,000.
Or the Help to Build scheme offers an equity loan to help you build a home or convert a previously commercial building.
Through the scheme, the government offers you a loan based on the estimated costs to buy a plot of land and build a home or buy a building to convert into a home.
And the First Homes scheme means prospective first-time buyers in England can get homes at a 30% to 50% discounted rate compared to market price.
But, if the homeowner decides to sell the property down the line, the discount on the new value will be made available to any future buyer too.
We sat down with San to discuss how he and Eleonora went from being renters to homeowners for The Sun’s My First Home series.
Tell me about your house
It's a one-bedroom ground-floor flat in Epping Gate, Essex.
We have a large, open-plan living room and kitchen and a terrace which we can also use to access the flat.
There's a utility closest which is useful for storage.
We have one master bedroom and a main bathroom.
How did you decide on the location?
We were living just around the corner from the development when we came across the Fairview development.
Eleonora has lived in the area since she came to the UK from Italy ten years ago and she didn't want to leave.
It's really convenient for work and it's a good area, so there was no need to look elsewhere.
How much was it?
Our house cost £339,000 and we put down a 1% deposit of just over £3,000.
We were able to do this because we used the Save to Buy scheme.
The scheme allows first-time buyers to save for their final deposit via fixed monthly payments while living in their new home.
We're currently paying fixed monthly payments of £1,590 a month towards a deposit with the aim to buy by November.
This is only £400 more than we were paying in rent for a one-bedroom flat previously, and instead of going into a landlord's pocket, it's being invested into our future.
By this point, we will have saved a 5% deposit of £16,950.
We don't yet have a mortgage, but we did have to get a mortgage in principle before we moved in.
Our payments could change when we apply for the mortgage, but until we apply we do not know what exactly that would be.
From previous conversations with brokers, they say our mortgage should be around the same amount.
This will be reviewed around six weeks before we complete on the property.
If it wasn't for the scheme, we wouldn't have been able to get onto the property ladder for at least another three years.
How did you save for it?
Eleonora and I had never set out to save for a deposit because we thought that homeownership was a long way off.
But we did have around £9,000 in savings that we had built up over nearly four years together.
I always tried to put between £400 and £700 a month into a savings account.
Because my work is based on commission, how much I could put away would vary from month to month.
Because Eleonora had a more fixed salary, she was able to put away around £1,000 a month.
But as we weren't saving with a specific goal in mind, the amount we had in our savings would fluctuate, for example, if we decided to book a holiday.
That said, we have also maintained good saving habits that have put us in a good position when this opportunity came along.
Eleonora has signed up to pretty much every supermarket loyalty scheme and uses them every time she shops.
Whenever we ate out, we would use TheFork app to get discounts on meals of between 20% and 50% at specific restaurants.
Doing all of these things meant that we had cash left over at the end of the month to add to our savings.
How did you afford to furnish it?
The house came with brand new integrated appliances in the kitchen and modern fixtures and fittings throughout.
We also had a lot of furniture from our rented flat that we brought to our new place with us, including a sofa and smaller things like coasters.
We bought a new bed and a new wardrobe from our savings, which were still quite healthy after keeping up with our good saving habits.
What advice would you give to other first-time buyers?
Definitely see what schemes are out there because it could help you to get on the ladder much quicker.
Building up a deposit is hard, so getting a helping hand isn't something to turn down.
Meanwhile, we reveal how one family used the snowball method to clear £26,000 worth of debt and buy their first home.
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One savvy saver managed to put half of his wages away while still renting to buy his first home.
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