A YOUTUBER from Essex has defied the odds and bought a £200,000 one-bed flat by the time she turned 22.
Hazel Wood, now 23, managed to save £20,000 for the deposit and moving costs by living with her parents, which meant she didn’t have to give up going on holiday or on nights out.
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She also used a Help to Buy equity loan from the Government to pay for 25 per cent of the property which came to £50,000.
Single first-time buyers are expected to take 10 years to save for a house deposit, but Hazel, who works in financial planning, managed to do it in just two years.
She bought her Witham flat in July 2018 and has since then been sharing her money saving tips on her YouTube channel to help others get on the property ladder.
Hazel put most of her salary into savings leaving herself just £200 a month to live off – which allowed her to still have nights out with her friends and even go on holiday.
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She explained: “Every month, I would automatically put a massive chunk of my salary into my savings.
“I definitely had to make sacrifices to do this. For example, I pretty much stopped eating out and I cut down on clothes shopping.
“But I gave myself a monthly allowance of around £200 with which I was allowed to do whatever I wanted.
“It doesn’t seem like a lot but when you’re saving, you realise £50 per week is enough to still go out with your friends or go out for a cheap meal if you really want.
“Instead of going out to a pricey bar for cocktails, my friends and I would have pre-drinks at home and then go out, so I would only end up spending around £10 at a bar.
Hazel’s top five tips for saving for a house
HAZEL shares her top tips on how to save for a house after she managed to save £20,000 over two years:
Make a plan: Decide how much you want to save and put a plan in place as to how long it’s going to take you to do this. Whether it will take two years or five years, getting in the mindset now and starting to save will make all the difference.
Stay focussed: Go visit potential houses and show-homes to stay focused on your goal. It’s an exciting (and free!) weekend activity that will keep you motivated.
Assess your outgoings: Look at your essential outgoings and see if they can be reduced. Also cut back on all non-essential spending. Do you need Spotify? Can you take your lunch from home instead of eating out? Can you go for a walk with your friends rather than going out for drinks?
Evaluate your career: Talk to your employer and see what you can do to increase your salary. Complete any employer-sponsored exams that will accelerate your career and find out what you need to do to get promoted! Every time I gained a pay rise at work, I would financially act as if I hadn’t and transfer the extra money straight to my savings. If you can’t get a pay rise, look into getting a part-time job to bump up your savings.
Reward yourself: This is so important! Celebrate every time you’ve hit your monthly goals and treat yourself to something small. Saving for a house is a lot like being on a diet. You need to reward yourself every so often so you can stay on track and not overspend.
“Sometimes I would save up some of my allowance over a few months and go on holiday. I actually went on several holidays in the two years that I was saving!
“I would scour the internet for the cheapest city break deals. I would only go away for a weekend to keep it economical and then give myself a strict holiday spending budget.
“It’s certainly possible to still socialise when you’re saving. You just have to change up how you spend time with your friends – go for a walk with them or cook dinner at home together.”
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As well as living with her parents rent free, Hazel reassessed her finances to see what she could cut back on to boost her savings.
She saved £100 a month by “changing her car” and switched to a SIM-only contract to reduce her costs “considerably”.
Hazel also cancelled her Spotify, Netflix and Hayu subscriptions to slash costs by another £25 a month.
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Looking for other ways to increase her income, she sat her finance exams back-to-back in her first year of saving which mean she got a pay rise sooner.
Hazel would regularly visit show homes to keep her motivated while she saved.
She explains: “Looking back, I do wish I had rewarded myself more during the saving process.
“Some months, I would kick myself if I hadn’t saved enough and now I wish I had just celebrated what I had achieved.
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“I would advise potential homebuyers to treat themselves during the saving process. Give yourself a pat on the back for coming so far.”
By early 2018, Hazel had saved £20,000, but even though it was enough for a 10 per cent deposit, she didn’t earn enough for lenders to let her borrow the remaining sum.
Instead, she used the Help to Buy loan to make her mortgage smaller, put £10,000 for the deposit and used the rest of her savings to cover legal fees, ground rent, service charges and furniture.
Hazel added: “I love having my own flat. It’s enabled me to widen my YouTube content as I have an entire property to roam freely around. I can decorate it as I wish and give interior design tips to my followers.
“I get lots of requests from my subscribers to talk about saving for a deposit or buying your first home. I have filmed videos on these topics and plan to continue with it.
MY FIRST HOME
“I still try to save even now and I would love to buy another larger property in the next five years.
“It would be fantastic to keep my current flat as a rental property but that’s a dream more than an actual goal at this stage.
“Just having my own home right now is worth it.”
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have 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 – This is 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 their 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 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 on the Starter Homes website.
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