IF you’re saving for a house but don’t live at home, seeing your money drain away on bills can be disheartening.
But it didn’t stop first-time buyers Chelsea Sowersby, 26, and her partner Matthew Wilkson, 30, from living on just £125 to buy their £210,000 first home.
Chelsea and Matthew bought a £210,000 home in Pudsey, Leeds
The couple say they have lots of plans for their rennovations
Chelsea and Matthew lived very frugally to afford their home
Chelsea, an emotional wellbeing officer at a school, and Matthew, who works in a chemical plant, were paying £678 in rent for a one-bedroom house in Pudsey, Leeds.
They then set aside just under £400 for their other household bills including water, gas and electric, broadband and Council Tax, and put £200 into savings.
This left them with around £125 a week to cover their weekly food shop and petrol.
But the pair knew they’d need to do even more to keep a tight budget to raise the £21,000 they needed for their deposit.
Chelsea used some savvy money-saving tricks such as using a receipt app called Shoppix and taking part in market research.
To get them to step on the property ladder, the pair also made the most of their Lifetime Isas.
They opened the accounts in 2019 and put the maximum of £4,000 a year into her Isa, with the government paying an additional 25%.
In the end, they bagged a £5,000 bonus from the government between them to put towards their deposit.
Anyone between the ages of 18 and 40 can open a Lifetime Isa to save for buying a first home.
Savers are able to withdraw money from their ISA if they are buying a home, over 60, or terminally ill with less than 12 months to live.
But you’ll pay a 25% charge if you withdraw money or transfer the Lifetime Isa to another type of Isa before the age of 60.
We sat down with Chelsea to discuss how the couple went from being savers to homeowners for HOAR’s My First Home series.
Tell me about your home
It’s a three-bedroom end of terrace house in Pudsey, Leeds.
We’re currently working on getting the house renovated because it was quite outdated and needs a lot of work to get it up to scratch.
There’s a big back garden and a driveway, but we can’t use it yet as it’s full of debris and building material.
The loft is converted and we’re hoping to make that into a games room.
How did you decide on the location?
My partner was volunteering as a special constable with the police in 2020 and was doing lots of work in Pudsey.
He said it was a really nice area, so we decided to get a rental property there and we haven’t looked back.
There are lots of shops and it’s so convenient for work and getting into the city centre. It’s a really lovely community too.
How much was it?
Our house was listed at £200,000 but there was lots of interest in the property so we upped our offer to £210,000 and it was accepted.
We put down a 10% deposit of £21,000.
We took out a mortgage of £189,000 for 35 years with a five-year fixed rate of 2.7%.
The longer mortgage term means that my repayments are more manageable – coming in at around £678 a month.
How did you save for it?
We cut down on our spending
We first started saving for a deposit in 2017.
At the time I was a student, and I just started doing little things like cutting out going for coffee, eating fewer takeaways and having fewer meals out.
Matthew and I also started doing monthly shops instead of weekly shops.
We found this made us be more sensible about what we were buying by cutting out impulse purchases.
This saved us around £50 which went into our savings account.
Worked out our outgoings
In 2019, Matt and I looked at our outgoings to work out how we could put more money into our savings.
Our monthly bills came to around £1,000 a month.
This included £625 in rent for a one-bedroom house in Pudsey.
We also paid £30 for internet, £28 for water, £100 for gas and electricity and £125 in council tax.
We then put around £200 a month into our savings.
This left us with around £500 a month to cover other expenses such as fuel and our weekly food shop.
We would also use the PetrolPrices app to find the cheapest petrol near us.
This left us with around £125 a week to live on, which we found was manageable, but we did have to make sacrifices.
We did this for around four years.
I started a side hustle
When I was a student, I had a part-time job working in market research.
Doing this made me realise I could earn extra cash by taking part in focus groups.
The company would pay for your travel and offer payment as an incentive.
This would vary between around £50 for 30 minutes, up to £200 for two hours.
I did this for around a year and earned an extra £1,000 towards our deposit.
Online surveys
For the last five years, I have also used the Shoppix app to earn some extra cash for our deposit.
Shoppix offers tokens in exchange for answering short surveys on your shopping experiences and snapping pictures of your receipts in the app.
You get 30 tokens per receipt and can snap up to 30 receipts a week.
You then turn your tokens into vouchers or transfer the money into a PayPal account.
Over five years, I have earned around £120.
Free cash
Matthew and I both opened a Lifetime Isa in 2019. We saved £4,000 each tax year between us.
When we came to buy, we had £20,000 between us and got a bonus of £5,000.
How did you afford to furnish it?
We still had a lot of furniture from our rental house which we have brought with us.
Everything else is being bought in stages and we will look at getting more stuff as the renovation nears completion.
Mostly everything we have bought is second-hand and has been up-cycled. I think I’ve saved around £5,000 over around five years.
Facebook Marketplace was really useful for finding some good quality, second hand furniture.
We got two green velvet chairs in good condition for £15 each, and a large wicker basket, that we use for towel storage, for free.
I also love browsing in charity shops for smaller, decorative pieces.
For example, I managed to find some large, green cushions from next for £6 – they would have easily been around £20 each brand new.
We have set aside around £10,000 for our renovations.
To do this, we saved above our deposit amounts through good savings habits.
What advice would you give to other first-time buyers?
Just follow your instincts and get into good habits.
Getting the perfect home takes time but it’s worth the wait.
Here’s how one couple cut £11,000 off their deposit for their £217,000 first home.
An easy mortgage trick helped this family shave thousands off their £385,000 first home.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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