I saved HALF my wages while renting to help buy £315,000 first home

IF you’re saving for a house but don’t live at home, seeing your money drain away on rent can feel really disheartening. 

But it didn’t stop Juan Pérez Navarrete putting away HALF of his monthly wage into his savings account to buy his £315,000 first home.

Juan saved HALF of his wages per month to buy his £315,000 first home

He used the Help to Buy scheme to boost his budget by £63,000

He put aside £300 a month for “fun” things as part of his budgeting plan

Juan, 30, a nurse who moved to England seven years ago from Spain, had no family he could stay with to save on rent and buy a home quicker.

He was paying £450 a month in rent, but still managed to put half of his £2,000 pay packet towards buying a place of his own.

Taking on a lot of overtime at his work helped him boost his savings.

When he started saving for a house five years ago, he was on a basic salary of £21,500 – although he has had a promotion since then.

But taking on as many overtime shifts as he could handle meant Juan added an extra £15,000 to this.

Using the Help to Buy scheme meant he could increase his budget by £63,000 as well.

Under the Help to Buy scheme, the government will lend you up to 20% of the value of your property – or 40% if you live in London.

The loan is interest-free for the first five years and you only have to put a 5% deposit down for your home.

However, Juan put down a whopping 18% deposit at £57,000 because he had saved so much cash, and wanted to reduce the amount of money he was paying back on monthly mortgage repayments.

We sat down with him to take a snoop around his flat for The Sun’s My First Home series.

Tell me about your home

It’s a two-bedroom flat in Manchester, part of a new development built by Capital & Centric.

It’s an open-plan flat, with a living room, kitchen and dining room rolled into one.

There’s one bathroom, and I have a balcony too.

I love the flat because it had high ceilings, and feels modern and light.

How did you decide on location?

The development is in Piccadilly East in Manchester city centre. 

It means that it’s close to everything I need and the station too.

That means it’s ideal for me to commute to work, which is 45 minutes away.

Living in this flat reminds me of my hometown back in Spain – Malaga – and I wanted to have that same city centre feeling I used to get.

How much did you pay for it?

I paid £315,000 for the flat – but I could never have afforded it without the Help to Buy scheme.

I got a loan for £63,000 – without it, I would have had to look for something way cheaper, and outside of the city centre.

Shared Ownership was another government scheme I could have used to help me get on the property ladder – but I chose not to use it.

This scheme sees you buy a portion of the equity of a house from a housing association – and you’ll pay rent on the remaining share of the property you don’t own.

But I wanted to own the whole property, not just a bit of it, so decided to use Help to Buy scheme instead, which I’ll start paying interest on after five years time.

The banks wouldn’t lend me more than £195,000 for a mortgage, so it helped me buy a home that usually would have been out of my price range.

I took the mortgage out over 35 years at a five year fixed interest rate of 2.11%.

I put down a 18% deposit for it at £57,000.

My mortgage repayments are £660 per month. 

How did you save for it?

I made sure I was putting half of my monthly pay packet into my savings.

It was hard because I was renting at the same time at £450 a month.

I would aim to put £1,000 into my savings per month, £650 towards bills, £300 for fun stuff and any money left over would be put into my savings.

To keep to this budget, I made sure to cut down on bills such as my groceries and unnecessary things like clothes and gadgets.

Instead of buying expensive lunches, I would cook my own, saving me around £100 a month.

I didn’t travel at all on holidays during the pandemic, which saved me £5,000.

But the main way I saved so much money was taking on extra shifts. 

I took on loads of them, as many as I could – and this meant I got an average of £15,000 extra per year to put towards my house budget.

How have you afforded to furnish it?

Other ways I saved money was was by upcycling furniture.

Instead of buying an expensive big mirror, I bought a cheap mirror from Ikea and wooden panels to place around it, decorating it to make it look unique.

Compared to the mirrors I saw, I probably saved £200 doing this.

I also made my own shelving and shoe rack in the spare room, buying wooden panels and fitting them together.

That saved me £300 compared to buying it all brand new.

I also tiled the kitchen myself – this saved me £500 on labour fees.

Advice for other first time buyers?

It’s helpful to have a clear goal in mind of how much you want to save, and by when.

I knew I wanted to buy as quickly as possible, so worked out a budget on the maximum possible amount I could save each month.

Make sure you check out savings rates on savings accounts to make your money go further.

My mortgage repayments are £660, which is the amount of money people pay on rent for a flat in Manchester city centre.

Keeping in mind that the money you’re saving is going towards your own home, and not into the pockets of your landlord, is a great motivation.

One savvy saver went from being in debt to buying a £96,900 first home – here’s how.

Here’s how one couple bought their first home through auction – and paid just a 5% deposit.

One couple saved half of their deposit by ditching holidays – here’s how.

Juan makes some of his own furniture to save cash

He also has his own balcony in his flat, located in central Manchester