A SUPER scrimper from Kent managed to save almost £20,000 in two years for his first home using every trick in the book including meal prepping, commuting off peak and investing in stocks.
Nick Agwauncha, 27, bought his two-bed flat in Ebbsfleet for £284,000 in January last year – and now he’s sharing his tips on how you can do the same.
From halving his £150 a month commuting costs by commuting outside of peak hours, to taking a risk and investing £8,000 of his nest-egg into stocks and shares, Nick tried it all.
The banking consultant didn’t have to miss out on treating himself either, using his Tesco Clubcard points to pay for taxis and takeaways.
Nick lived with his parents while he saved, paying £250 a month towards rent and even slashed his food bill to £10 a week by meal prepping with his sister Ashley.
At the end of the two years, he ploughed £15,000 of his savings into a deposit for his home – using the rest proposing to his fiance Eve Obasuyi.
Nick also used a £56,000 Help to Buy equity loan to make his money go further, which he hopes to pay back within the next couple of years before he’s charged interest.
He’s now turned his cash saving tips into a blog, MoneyMedics, which he runs with Eve and Ashley, where the trio aim to debunk the myths of getting your finances into shape.
We sat down with Nick who spilled the beans on what it takes to become a property owner for this week’s instalment of My First Home.
What’s your home like?
I’ve bought a two bedroom flat in a new build block in Ebbsfleet in Kent.
Both bedrooms are doubles and the master has an en suite while the main bathroom is near the second bedroom.
I’ve also got a big open plan kitchen and living room.
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The estate is great because it’s got a massive park, a tennis court, playground and its own bus stop.
I bought it in January last year, got the keys in March but didn’t end up moving in until the October.
That’s because I paid for an interior designer to do it up to a high spec finish which took me another six months of saving.
How much did you pay for it?
I bought the flat for £284,000 with a £15,000 deposit which was five per cent.
I also took out a £56,000 Help to Buy equity loan from the Government which is interest free for the five years.
I’m still saving towards paying it back in the next two years so that I don’t get charged interest.
Over two years, I saved about £20,000 but I didn’t use all of it for the deposit.
How did you manage to save so much cash?
It was just after Christmas 2015 that I realised that I needed to sort out my finances and ended up learning so many tricks.
I moved back in with my parents place in London after uni, paying £250 towards living costs and stuck with public transport so I didn’t need to pay for a car.
I was earning around £24,000 a year so managed to tuck away between £300 and £500.
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.
Shortly after I started saving, I got a pay rise so began earning £27,000 and instead of spending more, I kept my outgoings the same and tucked away more cash.
One of the biggest regular savings I made was on my travel. A monthly travel card would normally cost me £150 a month to commute to my work in Canary Wharf.
But if would travel off peak, tapping in before 6:30am and not tapping in again until after 7pm.
That meant that I could then take advantage of a third off that I get with my 16-25 railcard which all in all brought down my commuting costs to between £70 and £80.
I also joined forces with my sister and meal prepped every week. We spent £20 on ingredients which was £10 each when split between the two of us.
I moved jobs again in June 2016 and my pay went up to £36,000 – again I stuck with the same outgoings so could put aside between £600 to £800 a month into savings.
I only spent money on clothes during the January or summer sales which meant I could buy things like Levi jeans for around £40 which would have cost £80 at full price.
Me and Eve would still go out for meals but we’d Google to find new restaurants that were running a soft launch before opening and offering discounts.
Sometimes it would take a while to find something but it meant we’d dine at really posh restaurants for Nando’s prices.
I also made sure to shop at Tesco to collect the Clubcard points which I could spent on taxis or a takeaway so I didn’t have to give up too much.
Why did you invest in the stock market? Wasn’t it a risk?
Once I had a substantial amount of savings, I decided to invest some of it into stocks and shares.
I’d already bought Apple shares but in 2016 I put £8,000 into shares which was managed by a company that chose where I invested them.
When I came to cash them in a year later, I’d made £1,100 which was more than I would have made in interest.
Of course, it’s a risk but because I wasn’t in a rush to buy a place I could afford to wait until the share prices rose again if they fell.
All in, I saved £20,000 in shares and in an Isa but I spent some of it when I proposed to Eve.
How did you decide on location?
I knew that I wanted to buy a new build property so I looked at places where the developments are in areas where I could still commute, which narrowed it down.
I found this one in Ebbsfleet and knew that Cross Rail was due to come this way.
They’re also supposed to be building a theme park too, all of which I knew would eventually push up house prices significantly.
This will hopefully mean that I would have made some cash on it when I come to sell it.
Did you need to do anything when you moved in?
When I bought the flat I asked for almost everything to be low spec because I knew that I’d be able to get exactly what I wanted for less than the developers charged.
They wanted about £8,000 to fit the bathroom, floors and built-in wardrobes but I knew the I could pay someone else to do it for around £3,500.
All in, I spent about £6,500 on doing up to the spec I wanted which, while isn’t necessary for everyone, I knew I wanted it done.
I stripped out the radiators, installed LED mirrors and got it all finished to a great standard.
What are your property plans for the future?
I’m hoping to make some money on it by renting it out for commercial reasons like TV and film producers or Instagrammers.
That’s why I had it done up so nicely. You can earn between £100 and £200 a day by doing this.
Eventually I hope to sell it and make some money on it but that won’t be anytime soon.
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