Buying a house or flat has never been so difficult. With property prices rising faster than the average wage, for those who have rent and bills to pay each month, home ownership may seem like it’s out of their reach. As I’ve found, moving in with your parents can be a great way to save the money you need in a shorter space of time, but this of course isn’t an option open to everyone. So, in a new series of blog posts I’ll be chatting to first-time buyers who successfully saved for a deposit while renting.
Today I’m chatting to Nathan Drewett, who, after several years of living in nightmare rental properties, finally bought his first home two years ago with his partner Ceri.
What made you decide to start saving for your first home?
It was always the goal, for many reasons. Being able to have more control, being able to have pets, being able to turn a room or garage into a gym and, yes, so that I wouldn’t be spending half my earnings paying someone else’s mortgage rather than my own. In the fourteen years of renting, I never felt like where I stayed was home.
I believe you were having problems with neighbours and landlords?
Yes, some very poor landlords and some really, really bad neighbours. There were drug dealers that would “come to life” from 10pm onwards and often until 3-4am. I tried to reason with them on many occasions, but they were loud and extremely aggressive. Despite appealing for help from the council, the police and our landlord, we got nowhere.
After that we had problems with a neighbour who had a sound system so loud the entire house would shake. Thankfully, he would turn it down after we politely asked him to, but this was a fairly frequent occurrence.
The landlady lived in Malta and would leave us to sort stuff out – we had to pay for a broken shower, for example, which we weren’t refunded until months later.
Our next place was lovely but it was small and had little soundproofing. We could hear, and sometimes feel, everything from the flat above. When someone was on the loo, what they were doing on the loo, when they were watching TV, what they were watching on TV, conversations could be heard very, very clearly. The most amusing, if gross, example of this was when the neighbours got a bit romantic. Our lightshade would swing and our bedroom door would rattle in its frame. This…was too much.
We moved back into a house again but here we had a serious mouse problem. The house had a funny odour that we later identified as mouse piss (lovely!) We’d have little visitors running around in ceilings and floorboards. Frequently, groups of them would be scuttling above our heads in the attic at 3am, keeping us both awake. The landlords, frankly, were crap in this respect. The house needed looking at by a professional and the holes filled up.
They instead decided to fill the house with mouse traps, that meant lots of injured, disabled, dying and decomposing mice everywhere. The dead mice were unpleasant to deal with, but the alive-but-severely-injured ones, were pretty heartbreaking.
How long did it take you to save the deposit for your house?
I’d been saving since 2005, really. I also invested some money in the stock market, although the world financial collapse in late 2007, pretty much scared me off from investing after that. As time went on, the rent increased, which meant that I was much less able to save and, by the time we were on the last property, I wasn’t able to save at all. We barely broke even and I knew that this wasn’t sustainable.
Did you have to make any cutbacks to set that money aside?
I’ve never been a huge spender and I don’t drive, so that kind of helped. Cutting back on food costs was not so easy as I was diagnosed with coeliac disease in 2010 and so food shopping bills pretty much trebled.
We wanted to get married but we put that on hold to save for the house. I proposed in 2010 and…we’re still not married!
vWhat advice would you give to other people who are thinking of saving for a deposit while renting?
If you can’t stay with your parents, find a property that is as cheap as you’re prepared to stay in. A small, cheap property with good neighbours and decent landlord is better for your mental wellbeing and finances than a bigger, more expensive property without.
Also, look at your monthly expenses, what are some of the sacrifices you can make? Do you, for example, really need the latest smartphone and a £50/month tariff? Can you shop for clothes on Ebay? Do you have stuff you can sell on Ebay? Always use resources online to find the best deals when appropriate. Clear your debts as soon as possible and don’t be afraid to balance transfer your credit cards if there are high interest charges. Finally, resources like MoneySavingExpert can be extremely useful.
Longer term, if you’re able to buy, be wary of government schemes like HelpToBuy where starting with a smaller deposit may result in cripplingly expensive mortgage payments further down the line.
When you were finally in a position to buy, was the property what you’d originally hoped for, or did you have to make any sacrifices to get on the property ladder?
Yes and no. One of my biggest dreams was having a home gym, which I’ve achieved, but yes, many sacrifices. The biggest is moving from Bath – the place where I work and had lived since 2005. Bath has huge issues with lack of supply of housing, Bath is also surrounded by Green Belt (in fact, two thirds of the entire BANES county is Green Belt), which is pretty much a block on any houses being built. This means very expensive house prices and almost all housebuilding is tiny flats that in the city centre that are mostly bought up by wealthy landlords. We had to move beyond Green Belt into another county entirely – Wiltshire. Our commute is now 2-3 hours a day, the town is essentially little more than a commuter town, and, yes, I miss Bath and the friends/community I had there.
When you were house hunting did you find yourself worrying about nightmare neighbours after all the rental problems you’d had?
Yes, absolutely. We looked at crime statistics in each street that we were considering buying a house in, and, if anything that looked slightly dodgy or the street looked rough, we would pass on it. After eventually buying, It took me pretty much a year to truly feel relaxed in our new home – I was always afraid that the neighbours would kick off for some reason or other. I even occasionally thought I heard scrabbling in the attic (i.e. mice), which turned out to be the rafters creaking in the wind. So yeah, those experiences can leave you with baggage that can take years to unload.
Now that you’ve got your own place, do you find that you’re more comfortable financially than you were when renting?
We’re paying less in mortgage fees than we were paying in rent on that last property. There are costs to consider such as buildings and contents insurance, life assurance, mortgage payment insurance, critical illness cover and all sorts of financial products that you now have to factor in.
In terms of buying, you will need a big chunk of capital besides the deposit itself. So, solicitor’s fees, a building survey, stamp duty, electrical and plumbing checks, and, of course, improvements and changes that you want to make to the house itself.
Be warned that you may end up spending a lot of money tending to things that are essential to the house that don’t necessarily make it look any better. For us, we had to replace the boiler, which is something that we’re only now being able to finish paying off, nearly two years later.
Because of these costs, we’re not really any financially better off. In the long-term, yes, we’ve set ourself on a better course, but right now, not really. Two years is still early days and there’s still work to do on the house, finances eventually permitting. Also, we both still want that wedding!
Here’s another thing: if you’ve been saving for years and you’re using to have a big chunk of capital, when it’s all gone, it’s really, really daunting. It took me a long time to get used to going from having savings to having next-to-nothing. It feels like a safety net has been removed and this can be very scary.
If you saved a deposit for your first home while living in rented accommodation I’d love to hear from you. Please get in touch in the comments below, on Twitter or by email.
