A 'life-changing' scheme took £56,000 off our £187,000 home – with just 5% deposit
FIRST TIME buyers Natalie and James managed to get £56,000 off the cost of their £187,000 first home – and they didn't even have to haggle.
Buying your first home is an expensive proposition, and many people often feel that getting your foot on the property ladder is simply not possible.
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But there are government schemes to help savers desperate for a place of their own.
Video editor Natalie, 24, and truck driver James, 25, used the First Homes Scheme to buy their two-bedroom semi-detached home in the Gleeson development in Moorland Green, Newcastle.
First-time buyers can buy a home through this government scheme with a discount of up to 50%.
Natalie and James managed to get a 30% discount worth £56,098 on their first home.
The discount on the house stays with the property forever, meaning the couple must give the same percentage discount to future buyers based on the property's value at the time of sale.
For example, a house that was on the market for €100,000 with a 30% discount will have to be sold for €70,000.
You can only resell your home to someone who also qualifies for the First Homes scheme.
To access the scheme you must have a deposit worth at least 5% of the discounted purchase price and earn less than £80,000 a year, or £90,000 in London.
Local councils can also add further rules, such as a local connection or reserving the properties for key workers only.
First Homes is usually offered on a small number of properties within new developments, so you will need to look for local builders advertising the scheme and apply through them.
If you don't know who your community is, you can find it here useful tool.
Natalie had stashed away £900 a month for three years to pay for their £6,000 deposit.
In September 2023, the couple finally got the keys to their new home.
We caught up with Natalie to talk about how she went from saver to homeowner for The Sun's My First Home series.
Tell me about your house
It is a three bedroom detached house in Moorland Green, Newcastle.
We have a separate living room and garage and a downstairs toilet that we have converted into a utility room.
Upstairs there are three bedrooms: the master bedroom, a dressing room and a room that also serves as a guest room and office.
There is also an en suite bathroom to the master bedroom.
How did you determine the location?
Our house is just an eight-minute drive from my parents' house where I used to live, so I know the area very well.
We wanted a house that was a modern blank canvas and ready to move into, while sometimes a renovation project or a second-hand house can't be the right style.
The house was also within our budget, so we decided to go for it.
How much was it?
Our house cost £130,896.
We took out a mortgage of £124,000 over 35 years at a fixed rate of 6.31% for five years.
We decided to go for a fixed-rate mortgage because we were afraid that interest rates would rise again.
In retrospect, we might have been better off opting for a shorter-term solution as interest rates have fallen, but we just wanted peace of mind.
Our monthly mortgage repayments amount to €731.
We could only afford to buy out a house because the house was available through the First Homes Scheme.
This allows buyers in England to buy their first home with a discount of up to 50%.
We got a 30% discount on our house, which was on the market for £186,994. This means that we received a discount of €56,098.
We paid a 5% deposit of £6,000.
Why did you choose to use the First Homes Scheme?
Without this arrangement we would not have been able to buy our first house.
It meant we could put down a small deposit of £6,000, which seemed a lot more feasible.
If we were to buy somewhere without the scheme, we would have had to save for a few more years or rethink our finances and put more money aside each month.
Of course, the scheme may not work for everyone as it only applies to new construction, but it was life-changing for us.
How did you save for it?
When we looked at the development in August 2023, we knew we wanted to buy, but never expected it to happen so quickly.
When we initially considered buying the house, we were told that the scheme expired before September, so if we wanted the house at 30% off, we had to act quickly.
First Homes does not have a national application deadline, but developers can set their own deadlines based on lot availability.
We were fortunate that our attorney was aware of the deadline and was quite prompt in organizing documents, and our sales manager was great as well.
We were fortunate that the deadline for the First Homes Scheme was extended until the end of September, which allowed us to relax and take a little more time.
We completed it on September 28, 2023.
I was fortunate that I had developed good savings habits so we were able to put down the £6,000 deposit straight away.
We both lived with our parents, which allowed us to save on rent.
I was lucky because my parents didn't charge me board and James only had to pay £200 a month.
I had very few expenses apart from the cost of using my car, so I could comfortably save around £900 a month.
This money wasn't specifically set aside for a down payment, so I'd still dip into it for vacations or other social occasions.
This is why the First Homes Scheme was such a lifesaver, because we had the money ready and were able to dive straight in.
How did you afford to furnish it?
We had budgeted approximately € 1,500 for furniture.
We bought things in stages to spread the costs and brought some furniture, such as beds and a washing machine, from our parents.
I was also lucky enough to receive a sofa from my parents as a housewarming gift.
What advice would you give to other starters?
The best thing you can do is check which government schemes you qualify for.
Be sensible with your goals and make sure you have an achievable goal.
Another family used the snowball method to pay off £26,000 in debt and buy their first home.
One savvy saver managed to save half his wages while still renting to buy his first home.
Do you have a money problem that needs to be solved? Get in touch by emailing money@the-sun.co.uk.
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