So for a while, Jack and I have been trying to save for a house. We’ve seen 2 different mortgage advisers, we’ve opened our own Help To Buy ISAs and we’ve researched every possible Government Scheme for first time buyers available. We’ve saved and saved and finally feel like we could be getting somewhere! However, there are downsides to all the saving. Saving £200 into a Help to Buy ISA each month is great, and it realistically sets a precedent for the future of my saving habits, even though it has obviously had a big impact on how we live our lives!
As millennials living in Cheltenham (the town with the fastest growing house prices in the UK), who are trying to buy for the first time, we have hit some serious snags. Our budget for a second hand house using the Help to Buy 5% deposit scheme is healthy, but our mortgage repayments would set us back £950 a month. Considering our rent is £770 in our current place, thats basically losing an extra £200 a month and only being able to save £200 between us once we’re in. If we go for a new build, we are eligible for the Help to Buy Government Equity Loan Scheme. Essentially you find a 5% deposit, the government lends you 20% of the property value, and you get a mortgage to cover the other 75%. When we sell, we pay back a 20% of the properties profit to the government. If we do this, our mortgage is slightly under our current rent cost and we will be able to continue to save £200 each a month afterwards.
So we believe we’ve found a development in our price range, with decent sized 3 bed houses. We put our names down for all the info immediately! They will be releasing one property in October/November time, and then others in 2019 (believed to be around March/April time). This gives us a bit more time to save towards the deposit. One we hit that, any extra saving will be a bonus! There are of course extra fees to pay such as solicitors and surveys, but the one lucky thing is Stamp Duty. As first time buyers, any stamp duty up to £300,000 is free. Now as we live in Cheltenham and it has the highest rising house prices in the UK as a town, you can imagine we still have to pay *some* stamp duty. But thankfully it is pennies compared to what it would have been before this new rule came in. So I am feeling somewhat lucky!
Granted, moving into a new build can be super risky, especially as you hear horror stories of how some are just thrown up in days. I’ve even seen some that were not built well (there’s a development the other side of town that is super cheap…and very obviously shoddy work!) but the developers we’ve found have been around since forever and really seem to know their stuff. They were also the first company to speak to Jack and I as if we were potential customers, so thats also a plus!
So with that, please wish us luck. Maybe by October I’ll be writing to you from my very own living room!