FIRST-time buyer Theresa Makombe used the 50-30-20 savings method to help save for a deposit to buy her dream home aged 27.
Sticking to the programme meant she could tuck away £800 a month over two years to boost her savings pot to over £22,000.
The pharmacist would split her salary each month, putting 50% of it towards bills, 30% for holidays, clothes and going out, and the remaining 20% into her savings.
Using a spreadsheet to log her spending habits, Theresa managed to stay on track, raising enough for a 15% deposit to secure her £146,000 three-bed first home in Leeds.
But the house hunting process did not come without its complications – Theresa's home wasn't the one she originally had her heart set on.
She narrowly swerved purchasing a £135,000 two-bed house after a £700 building survey revealed asbestos and damp – which would have cost her £20,000 to fix.
Gutted, the first-time buyer pulled out of the sale- but a month later she found what is now her first home.
It took her two years to save up enough money for a deposit, but she was lucky enough to live rent-free in her family home.
She completed on the house in December 2020 and moved in over January this year.
We caught up with Theresa for The Sun’s My First Home series – and took a look around her new home.
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 Sun Money's first-time buyer Facebook group for the latest tips on buying your first home.
Tell me about your home
It’s a three-bed semi-detached house near Leeds city centre, which dates back to the 1930s.
Upstairs there’s a bathroom, and there’s a lounge as well as a kitchen and dining room downstairs.
I have a back garden and a driveway.
It's the perfect location, about 15 minutes from the city centre, as it's close to where I work.
How did you pick the location?
I’ve lived in Leeds forever – my mum lives here too and I work in the city, so I knew I wanted to buy a house around here.
I reckon I was one of the first people to see the house pop up on Zoopla and Rightmove.
When I was house hunting, I was checking these websites every hour – once you start the search, it becomes obsessive.
A home survey will establish the condition of a property
A SURVEY gives a detailed inspection into the condition of a property, highlighting any major repair work that’s needed.
It can also help you decide whether or not you’re paying the right amount for your home.
The reports are carried out by qualified surveyors and costs vary from company to company. There are also different types of surveys depending on the depth of the report that you want and your budget.
These are the different types of surveys and their typical prices, according to the Homeowners Alliance:
Condition report, £300 or more
This gives a traffic light report to indicate the conditions of various states of the property – green for okay, orange for cause for concern.
The report provides you with a sumary of defects and possible risks but won’t provide any advice or valuations.
HomeBuyers report, £450 or more
On top of everything you get in the condition report, you’ll also get a valuation and an insurance reinstatement value – which is an estimate of how much you’ll receive if the building were to burn down.
Home Condition survey, £400 to £900
These are carried out by the Residential Property Surveyors Association (RPSA) rather than the Royal Institution of Chartered Surveyors (RICS) and includes information on broadband speeds, a damp assessment and boundary issues to consider. The price depends on the valuation of the property.
Building survey, £500 or more
These are extensive reports where the surveyor will go into places such as the attic, check behind walls and look between floors and above ceilings. It will also provide advice on repairs, estimated costs and timings, and what will happen if you don’t carry out the repairs. Prices depend on the size of the property.
How much did you pay for it?
The house was listed for £150,000, but I paid £146,000 for it after the seller accepted a lower offer.
It cost me £22,000 to secure it with a 15% deposit.
I took out a £124,000 25-year mortgage at a five-year fixed-rate, and my mortgage repayments are £650 a month.
How did you save for it?
I’ve been saving ever since I finished my masters degree in 2018 and qualified as a pharmacist.
But when the pandemic hit last year, I started to think seriously about putting my savings towards buying a house.
After watching a video on YouTube made by a savings expert about the stamp duty holiday, I thought it would be a great idea to get on the property ladder.
I thought it would be a good investment to buy a home now and save thousands of pounds avoiding paying for stamp duty, although it turns out I wouldn't have had to pay anyway thanks to the first-time buyer tax relief.
By the time I started house hunting in May, I already had £16,000 saved up.
I’ve saved a good chunk of money over the years by living with my mum.
She didn’t charge me any rent, so I reckon I was saving £500 every month compared to what I would be spending on a flat share in the city.
I also lived by the 50-30-20 savings method to help me meet my savings goal every month, which was to tuck away £800.
So when I got my salary through every month, I would put 50% of it towards bills, 30% of it towards fun stuff like holidays, clothes and going out, and the remaining 20% towards my savings.
I used a spreadsheet to help me track my spending habits and meet my savings goal every month.
So if I had overspent one month and only managed to save £700, I would make sure to make up this loss the month after by saving £900.
I ramped up my savings even more in 2020 by setting myself a challenge not to buy any new clothes – not even pants or socks – for the whole year.
I was spending a lot of money – probably around £250 to £300 a month – on clothes, picking up an outfit for an event or a night out or buying a coat I didn’t really need.
Some of the clothes I bought were quite expensive too – I would get things from Ted Baker, for example.
I managed to save £3,000 over 12 months – it was amazing how much I was spending.
Another saving I made was on fuel for my car.
I used to drive it in sports car mode, and fill up at the more expensive fuel stations.
But when I knew I wanted to buy a house, I drove it in economy mode, and went to local petrol stations and supermarket pumps to fuel up instead.
My bill therefore went from £50 a week to just £15 – and I saved £420 by the end of 2020.
Were there any complications?
I love my home – but it wasn’t the one I was originally planning to buy.
In August, three months after I started to house hunt, I found a two-bed house that I wanted to go and see.
But I rushed the first viewing, and didn’t take my time to fully inspect the house.
However, I really liked it, so put in an offer for £132,500 for it.
A week later, I was told someone had put in a higher bid than me, so I upped my offer to £135,000, which was accepted.
I heard that it's worth doing a structural survey on a house you’ve had an offer accepted on.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa – It's a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
Help to Buy equity loan – The Government will lend you up to 20% of the home's value – or 40% in London – after you've put down a 5% deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa – This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25% on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25% to 75% of the property but you're restricted to specific ones.
Mortgage guarantee scheme – The scheme opens to new 95% mortgages from April 19 2021. Applicants can buy their first home with a 5% deposit, it's eligible for homes up to £600,000.
But when I heard it would cost me £700, I hesitated. That would have been enough money to buy a sofa for my new home.
But I decided to go ahead and fork out the money for it – and I’m so glad I did.
I went along with the surveyor, who told me that the house was a builder’s project, and not suitable for a first time buyer looking to move straight in.
He said the house had asbestos in it, and had bad damp.
He also pointed out mouse droppings I didn’t spot when I had my viewing – so there could have been a pest problem.
I pulled my offer straight away, and was so thankful I got the survey done in the end.
But it meant that there were complications with my mortgage when I was buying the house I now have because it was more expensive, not because I'd pulled out of the sale.
When I told my mortgage provider that the house I wanted to buy was £11,000 more expensive than the old one, they wouldn’t lend me any more money.
So I had to switch lenders in order to get a bigger mortgage.
How did you afford to furnish it?
I made sure to put aside some of the money I had been saving up to put towards furnishing my house.
Big bits of furniture, like my washing machine and mattress, were bought brand new – but to cut costs, I bought a lot of stuff second hand.
I got a brand new sofa from Facebook Marketplace for just £300.
The people I bought it from got the wrong kind of sofa so sold it on for much less.
It was originally £1,000, and arrived with the tags still on – it was amazing.
I also bought a dining table and chairs on there for £100 – I spotted a similar set being sold for £350 on another shop's website.
What's your advice to other first time buyers?
Make sure you take your time when you're viewing a house.
I rushed my viewing for the first house I put an offer in for, which meant I didn't spot some of the red flags that cropped up in the survey I had done – such as the damp on the walls.
Make sure not to get too lost in it all and excited when you find a home you love.
Step back and try to keep a cool head – I didn't go for a second viewing because I wanted to buy the first house so much, but I definitely should have.
House hunting requires a lot of patience – so don't try and rush the process.
I was inspired to buy my house after watching a YouTube video – so I made my own video to help give others advice about buying their first home too.
Here's how Joely Harris, from the Isle of Wight, set up a bakery business to help save £10,000 for her first home.
If you're a key worker, you could get a 20% discount on your first home – here's how bank worker Bolu Sofoluwe did just that.
Find out how an NHS worker did four jobs and ditched haircuts to buy his £299,000 four-bed first home.
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