Lad bought mum’s 3-bed council house – and mortgage saves him £1k a year

    GETTING a foot on the property ladder feels like a dream for most of us.

    But it can be done, with the number of first-time buyers at a 10-year-high, according to UK Finance.

     David Hinder bought his council house with his mum through the Right to Buy scheme

    North News and Pictures

    David Hinder bought his council house with his mum through the Right to Buy scheme

    That’s why we’ve launched our new My First Home series where every week we speak to a different homeowner to find out what it really takes to finally get the keys to your own pad.

    Even though many first-time buyers are unpacking boxes into a new build thanks to the Help to Buy scheme, there are still plenty of homeowners who are picking up the keys to something older.

    And some don’t even have to move out of the house they already live in, thanks to the Government’s Right to Buy programme.

    More than 60,000 council-owned houses have been sold under the scheme in the past six years.

    We spoke to David Hiner, 21, who bought his three-bed council house with his mum Tracey, 47, through this scheme earlier this year.

    It meant they didn’t have to move out of their home in Sunderland where they’ve lived for 11 years – plus they now pay less in mortgage repayments than they did previously in rent.

    Here’s how he did it.

    What’s the house like and how much did you pay for it?

    It’s a three-bed terrace with a garden in Stanley, County Durham. The house is on a hill which overlooks open countryside and I live here with my mum, Tracey.

    We completed on the house in April and even though it was valued at £46,000 we only had to pay £34,288 as we had built up a really big Right to Buy discount
    over the years.

     David and his mum Tracey have lived at the house for 11 years

    North News and Pictures

    David and his mum Tracey have lived at the house for 11 years
     The three-bed semi-detached home in Sunderland

    North News and Pictures

    The three-bed semi-detached home in Sunderland
     The scheme meant that David and Tracey could get on the property ladder without having to move

    North News and Pictures

    The scheme meant that David and Tracey could get on the property ladder without having to move

    Why did you buy your existing home?

    We’ve lived in the house for 11 years and we are really happy here. There’s a real sense of community so we didn’t want to move away from the friends we’ve made.

    It was just really important to me – actually, to us both, to be on the housing ladder.

    It was really bothering me that we were paying all this rent each month to the council and had nothing to show for it.

    So once I got a permanent job – at a community interest garden centre in Sunderland, Tyne and Wear – I decided to start looking into how we could buy the house.

    I spoke to the council and we had to fill in some Right to Buy forms. They approved our application to buy – and confirmed the discount – so I just needed to go and find a mortgage.

     The house was valued at £46,000 but they only had to pay £34,288 with the Right to Buy discount

    North News and Pictures

    The house was valued at £46,000 but they only had to pay £34,288 with the Right to Buy discount
     High Street banks like Lloyds, TSB and Halifax told David they wouldn't lend to him

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    High Street banks like Lloyds, TSB and Halifax told David they wouldn’t lend to him
     Not all lenders offer mortgages for “pre-fab” homes because they are not sure what extra complications this kind of structure has for the future

    North News and Pictures

    Not all lenders offer mortgages for “pre-fab” homes because they are not sure what extra complications this kind of structure has for the future
     David and his mum had to get a specific Right to Buy mortgage

    North News and Pictures

    David and his mum had to get a specific Right to Buy mortgage

    Was it difficult to get a mortgage?

    At first I went to several high street banks, including Lloyds, TSB and Halifax. I went to each one in person to apply for a mortgage. But one by one they all said they wouldn’t be able to offer me a loan.

    There were a few complications too, which didn’t help. Firstly, we needed a Right to Buy mortgage and secondly because I was in a reasonably new job I didn’t have much of an employment history.

    And my mum doesn’t have a job at the moment and is claiming Job Seekers Allowance, which isn’t recognised as an income by some lenders.

    What is Right to Buy?

    RIGHT to Buy was originally introduced by Margaret Thatcher through the Housing Act 1980.

    It allows eligible council tenants to buy their property at a discount.

    The rules are different for England, Wales and Northern Ireland.

    In all parts of the country, the discount is calculated according to how long you have lived there.

    In England you need to have lived in the house for three years and the rules allow you to make a joint application with someone who shares your tenancy.

    You get 35 per cent off a house (50 per cent off a flat) between three and five years.

    After five years, the discount goes up by 1 per cent (2 per cent for a flat) for every extra year you’ve been a tenant, up to a maximum of 70 per cent or £108,000 in London and £80,900 for the rest of England.

    In Wales you need to have lived at the property for at least five years and the discounts are the same but to a maximum of only £8,000.

    But, Right to Buy in Wales will end for all Council and housing association tenants on January 26, 2019.

    In Northern Ireland it’s a minimum of five years and the discount is 20%

    discount of the market value. The discount increases by 2% for each additional tenancy year to a maximum of 60% or £24,000 whichever is lower.

    Scotland abolished Right to Buy in 2016.

    And finally, the house we live in is a “pre-fab” [prefabricated homes were built in their hundreds to cope with the acute housing shortage after the Second World War. They come in pre-built parts instead of being built from scratch] which not all banks offer mortgages for. All the odds were against us.

    How did you manage to get a mortgage in the end?

    I searched online for companies that specialised in mortgages for people with unusual circumstances – and for those that offered Right to Buy loans for pre-fab homes.

    I came across a company called Together which said it was a specialist finance company for people with complicated financial circumstances which means that they may not qualify for a mortgage on the high street.

    That was exactly us.

     David had to get help from a specialist finance company, Together, to help him get a mortgage

    North News and Pictures

    David had to get help from a specialist finance company, Together, to help him get a mortgage
     Tracey and David felt it was important for them to own their own home

    North News and Pictures

    Tracey and David felt it was important for them to own their own home
     The spare bedroom is used for extra storage space

    North News and Pictures

    The spare bedroom is used for extra storage space

    I had to send about four months worth of bank statements – mum too – and other bits of paperwork like my employment contract and the small number of payslips I had.

    We also provided proof that we had never missed a rental payment in the 11 years we’ve been here. They came back with a “yes” after a few weeks.

    What size deposit did you pay and what mortgage did you get?

    We paid a deposit of £9,818. About half of it was given to us by my grandmother and my aunt to help us buy the house. I saved about £5,000 of it over a year.

    I’m not a particularly big spender and so at the end of every month I would just put whatever was left after bills and spending into a savings account.

    We then needed a mortgage of £24,470. We signed up to a five-year fixed rate mortgage at 7.12 per cent.

    Even though the rate is higher than standard mortgages on offer on the high street, the mortgage payments are much cheaper than rent. We are saving £90 a
    month paying £264 compared to £354 a month in rent.

     Being able to buy the house they had been living in for 11 years meant they didnt have to pack up and leave

    North News and Pictures

    Being able to buy the house they had been living in for 11 years meant they didnt have to pack up and leave
     Once David had got a permanent job he started to look in to what he needed to own his own home

    North News and Pictures

    Once David had got a permanent job he started to look in to what he needed to own his own home
     With help from family, David saved enough to put down the £9,000 needed for a deposit

    North News and Pictures

    With help from family, David saved enough to put down the £9,000 needed for a deposit
     David says owning his own home has given him a sense of security

    North News and Pictures

    David says owning his own home has given him a sense of security
     David has no plans to move house again in the future

    North News and Pictures

    David has no plans to move house again in the future

    How did you feel when you completed?

    Mum and I are both really happy. Having somewhere that we can really call our own has given us a sense of security for the future.

    I don’t know anyone my age who has bought their own house. A lot of my mates are at university but when I started work, I knew that I wanted to buy my own home as an investment for the future for me and my mum.

    How do you get a mortgage under Right to Buy?

    GETTING a mortgage is not as straightforward as with buying any other home.

    Not all mortgage lenders offer Right to Buy mortgages so you need to do some shopping around.

    On the high street, Nationwide, Barclays, HSBC are among the banks and building societies that will look at Right to Buy. Certain specialist lenders such as Together and Precise Mortgages and Vida Homeloans will also consider them.

    Unlike standard applications, many lenders will not require you to put down a deposit for a Right to Buy purchase. The discount offered to you by the local authority can act as your deposit.

    However, the amount that you can borrow is calculated in the same way as any other mortgage and is based on your income and expenditure. So you will need to make sure you can afford the monthly repayments.

    When do you think you’ll move again?

    I’m not sure I’ll move again. It’s too much hassle and we’re very happy here. This is my home for life!

    What’s it like living with your mum?

    We get on really well so it’s great. She does all the housework and chores as I’m out working – so it works well.

    What help is out there for first-time buyers?

    GETTING on the property ladder can feel like a grim task but there are schemes out there to help first-time buyers own 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.

    Help to Buy equity loan – The government will lend you up to 20 per cent of the home’s value – or 40 per cent in London – after you’ve put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.

    Lifetime ISA – 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 your first home. You can save up to £4,000 a year and the government will add 25 per cent 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 per cent of the property but you’re restricted to specific ones.

    “First dibs” in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.

    Starter Home Initiative – A government scheme that will see 200,000 new-build homes in England to be sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest here.


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