LONDON Underground station supervisor Ian Legg was given £4,000 in free money simply by shopping for his £420,000 first house in Harlesden, London.

Ian, 43, solely needed to take out a £97,000 mortgage and put down a deposit of simply £8,000 for his swanky two-bed flat as a result of he purchased it via a shared ownership scheme.

Ian has a shared possession house – which meant he may take out a smaller mortgageCredit score: Steve Finn

He only had to put £8,000 down for his swanky two bed flat

He solely needed to put £8,000 down for his swanky two mattress flatCredit score: Steve Finn

It implies that Ian owns 25% of his flat, whereas Hyde New Properties, the developer and housing affiliation, owns the remaining.

He mentioned he would by no means have been in a position to purchase a home like this if it wasn’t for the scheme.

Ian even bagged £4,000 in free money from Westminster Metropolis Council as a result of he beforehand rented a particular house from the council earlier than he purchased his shared possession house.

Councils and housing associations usually have schemes – known as intermediate lease schemes – for these seeking to save up for a shared possession property.

It means a budding purchaser can stay in a flat the place lease is subsidised and round 20% cheaper than the going market price.

These schemes purpose to assist tenants save extra to allow them to transfer on and purchase a shared possession property of their very own.

Westminster Metropolis Council runs its personal intermediate lease scheme the place it offers £2,000 in free money for yearly a tenant stays in its properties.

The tenant is given this money – so long as they go on to purchase a shared possession property.

As Ian lived in his rented flat for 2 years, he bought a £4,000 bonus – which he put in direction of furnishing his new house.

However you may get a most of £10,000 in the event you stay there for 5 years – the utmost size of time you’ll be able to keep in and lease one in every of these properties.

Ian lives together with his companion however purchased the flat himself.

He earns £48,000 a yr, and acquired no monetary assist from pals or household.

We caught up with Ian to see how he went from being a tenant to a house owner for The Solar’s My First Home sequence.

Inform us about your flat

It’s on the second ground of a new-build block of flats in Harlesden, London.

It has two beds, and the spare bed room is at the moment used as an workplace and pastime room.

I wished to purchase a two-bed flat so if my circumstances change, I can all the time lease it out and it’ll assist to cowl my mortgage repayments.

However I’m having fun with the additional area it offers me and my companion up to now.

It additionally has a front room, and I painted the hallway purple – which I’ve all the time wished to do, however by no means may as a result of I’ve all the time rented.

How a lot did you pay for it?

I don’t personal all of my flat – I purchased it via a shared possession scheme.

Shared possession lets consumers buy a portion of the fairness in a property if they can not afford to take out a mortgage for the whole worth of the house.

Execs and cons of shopping for a shared possession house

YOU can use the shared possession scheme so long as your family earns £80,000 a yr or much less, rising to £90,000 in London.

You have to be a first-time purchaser or have bought your private home and be unable to afford a brand new one.

Make certain to contact your local Help to Buy agent to see which schemes you might be eligible for in England and your native authority in Wales.

However earlier than forking out, you may have to know the professionals and cons of shopping for a shared possession house – we clarify under:

Execs

Extra inexpensive to purchase: You do not have to purchase the entire property, so you’ll be able to take out a smaller mortgage on your house – making your month-to-month repayments much less
Smaller deposit: You solely should put down a deposit on the portion of the home you might be shopping for – this may be as little as 5%
Construct up your fairness: You can even slowly construct up full possession of your property by making “staircasing” funds

Cons

Promoting it on: If you have not staircased to personal 100% of your property, it’s a must to purchase it onto a purchaser who meets the shared possession scheme standards – limiting your pool of potential consumers
More durable to get shared possession mortgage: You might want to get a particular shared possession mortgage – there are fewer lenders providing a majority of these loans in comparison with conventional mortgages
Prices on your private home: There will probably be service expenses to pay and there may very well be restrictions on renovations or having pets
You could have to maneuver additional afield to get a shared possession house – there will not be a scheme moving into your most popular location

Meaning I co-own my house with Hyde New Properties, the developer, and I get charged lease on its portion of the property.

I personal 25% of the flat, and I pay £450 in lease per thirty days.

My mortgage is smaller too as a result of I didn’t have to purchase all the flat – I took out a £97,000 particular shared possession mortgage on a 28-year time period with a hard and fast price for 5 years.

It additionally meant I paid a smaller deposit – I put down a 5% deposit for it at roughly £8,000.

I wouldn’t have been in a position to afford a flat outdoors of London, nevermind one within the metropolis, if it wasn’t for the shared possession scheme.

How did you go about getting a shared possession home?

I first knew I wished to purchase a shared possession house after my brother purchased one in every of his personal 4 years in the past.

I knew I’d by no means be capable of save up sufficient for a deposit for the sort of house I wished.

So three years in the past, I moved out of personal rented lodging in Tooting right into a council-run renting scheme designed for individuals saving for a shared possession house in Ladbroke Grove.

Councils and housing associations have schemes – known as intermediate lease schemes – for these seeking to save up for a shared possession house.

These schemes provide properties with cheaper lease charges, designed that can assist you save extra for a deposit.

You possibly can save as much as 20% on renting one in every of these properties, in comparison with the market price.

I utilized for Westminster Neighborhood Properties’ intermediate lease scheme, and stayed there for 2 years.

Builders usually promote shared possession properties to individuals dwelling within the native space, so I utilized to lease on this scheme as a result of it was within the space I initially wished to purchase in.

The eligibility standards for these renting schemes may fluctuate relying on who’s operating the scheme, however for my one, I needed to have an earnings lower than £60,000 a yr, work in Westminster, and have a job.

You’ll be able to test which intermediate renting schemes are on provide by asking your native council – you’ll find out which is yours, utilizing the gov.uk’s tool.

I paid £1,000 a month in lease for my flat – however once I checked on Rightmove, I noticed the identical sized flats in the identical space would price as much as £1,900.

Final yr, I started to have a look at shared possession properties to purchase, and after a number of schemes, I fell in love with the flat I’m in now.

I utilized to Hyde New Properties to purchase it in December 2019.

The appliance course of was fairly intense – I had to supply six years of checking account statements and 6 years of financial savings account statements.

I used to be profitable, and bought the keys and moved into the home in January 2020.

How did you get the free money?

As I used to be transferring out and into my new flat, the lettings supervisor at tWestminster Neighborhood Properties’ intermediate lease scheme jogged my memory that I may get free money as a result of I had efficiently purchased a shared possession property after staying on the scheme.

The council offers you £2,000 a yr in case you are a tenant and saving for a shared possession house.

That is to help tenants with their transfer and to cowl authorized charges.

So long as you purchase a shared possession home after leaving the scheme, you’ll get this money.

You’ll be able to keep a most of 5 years in one of many council’s subsidised rented properties, and you may stand up to £10,000 free money in your pocket.

I lived there for 2 years, so bought £4,000.

All I needed to do was affirm to the lettings supervisor I had purchased a shared possession house, and the money landed in my account a month or so later.

As a result of councils run their very own intermediate lease schemes, you will not be provided the identical deal as I did.

Once more, it’s finest to test in together with your native council in regards to the perks of the scheme that they’re providing.

How did you save for it?

Thanks partially to the subsidised lease, I used to be in a position to tuck £400 away per thirty days into my financial savings – £200 of which I put into Premium Bonds, and £200 into my Assist to Purchase ISA.

I additionally saved in different methods too.

I’m generally known as the man who will all the time stick his hand up for additional time at work – on common I’d choose up two further shifts a month, giving me £500 further.

I’d want to work additional time so I can deal with myself extra usually, as an alternative of dwelling on a brilliant tight price range.

I really like the cinema – however I lower down the variety of journeys I used to be making.

Each month I used to be spending round £100 on tickets – I saved £75 per thirty days by watching Netflix and Disney subscription providers as an alternative.

I additionally by no means pay full value on my buying as a result of I exploit cashback web sites like Quidco.

I bought a median of £50 per journey in cashback by reserving my holidays via the location – I went on three holidays over the time I used to be saving for my deposit.

Bringing a packed lunch into work helped me save £200 per thirty days as effectively.

I’d be spending roughly £10 a day on lunch from Sainsbury’s – however I ditched these journeys and made my very own sandwiches.

How have you ever afforded to furnish it?

The £4,000 in money I bought from Westminster Neighborhood Properties went straight in direction of furnishing my new flat.

I purchased wardrobes for the bedrooms, a mattress, a mattress, curtains and blinds utilizing this cash.

It was nice to get this cash, as I had a flat however not plenty of spare money to furnish it up.

What’s your recommendation for different first time consumers?

Do your analysis and see whether or not shared possession properties are an excellent possibility for you – particularly in the event you don’t have plenty of financial savings.

Look into whether or not there are any schemes councils are providing that can assist you lower your expenses.

Get in contact together with your native council and see what choices can be found to you.

When you’re searching for shared possession properties, Share to Buy is a superb web site to have a look at – because it lists builders and housing associations providing properties on the market.

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