We bagged a ‘perfect’ three-bed home with just £22k through little-known scheme – but we had to make huge decision first
A COUPLE were faced with a tough decision after realising they were fed up with renting – but now they’ve bagged a dream three-bed home and know they made the right choice.
Adam and Jodie Davies were due to get married in September, but they were renting and knew they wanted buy a home, so realised they needed to choose between a wedding or saving for a deposit.
But when the couple discovered a little-known scheme that meant they would be able to buy a home now, they decided to ditch the wedding and use the £10,000 they had saved for it, plus their remaining £12,000 savings, to put down a deposit.
The scheme meant Adam, a 34-year-old finance manager, and 32-year-old Jodie, an operations manager, were able to bag a three-bed Bellway home in Ebbsfleet Garden City, Kent in June.
They lost a £3,000 deposit by cancelling the wedding, but feel it was still the right decision.
Adam said: “We were living in a rented two-bedroom apartment in Ebbsfleet Garden City, and had a conversation in the Christmas holidays in 2023 about buying our own house.
“We were fed up of paying rent when we could try to get a joint mortgage and have our very own place.
“We had £22,000 saved up, and eventually took the decision to cancel [our wedding]. We lost a non-returnable £3,000 deposit on the venue but figured it was best to just take the hit.
“After that, we put all our energy into finding a house and organising a much cheaper wedding this summer.”
Adam and Joe managed to get their home, which cost £444,950, through a deposit contribution scheme.
The couple put down a 5% deposit which Bellway Homes matched.
So, the couple were able to bag the nearly half-a-million pound property with just a £22,500 deposit.
The Ebbsfleet home is well-placed for Adam and Jodie as both have just a half-hour commute to work.
The property also comes with two off-road car parking spaces and a south-facing garden.
“This house is perfect for us and it is future proofed,” Adam said.
“We want to start a family soon, so having three bedrooms means we can have a baby and not have to move.
“We know we made the right decision.”
Other similar schemes
Launched in June 2021, the Deposit Unlock scheme lets you buy a new-build home with just a 5% deposit, although you can pay up to 9.99%.
Mortgage lenders are usually stricter on the amount they are willing to lend people wanting to buy a new home, as in some cases they can lose value after being built.
That means lenders often set the minimum deposit for new build properties at 15% or even 25%.
However, the Deposit Unlock scheme was devised to get around this and let homeowners with a smaller deposit get on the property ladder.
The Home Builders Federation says the scheme has helped “hundreds” of homeowners get on the ladder, suggesting take-up is quite low.
Through the little-known scheme, building developers pay into an insurance policy for the buyer’s mortgage provider which reduces the bank’s risk and makes them more willing to offer a mortgage to someone with a lower deposit.
The maximum mortgage you can take out on the scheme is normally £833,250, although this depends on the lender.
Beware that not all housing developers are signed up to the scheme.
Here is a list of developers that are, according to the Home Builders Federation:
- 3West Group
- A R Cartwright
- AJ Property Group
- Allison Homes
- Anderson Design & Build
- Anderson O&U
- Ashberry Homes
- Ashwood Homes
- Baker Estates Limited
- Barratt Homes
- Barratt London
- Beal Homes Limited
- Bellway Homes
- Bellway London
- Bewley
- Blackstone Developments Limited
- Bloor Homes
- Bovis Homes
- Braidwater Limited
- CALA Homes Limited
- Campion Homes Limited
- Chase New Homes
- City & Country Homes
- Countryside Properties
- Crest Nicholson
- Croudace Homes
- David Wilson Homes
- Davidson Group
- Deanfield Homes
- Denbury Homes
- Devine Homes
- Devonshire Homes
- Durkan Estates
- Edenstone Holdings
- Edwards Homes
- Fairgrove
- Fairview
- Fenwood Estates
- Fortitudo Limited
- Genesis Homes
- Gleeson Build & Develop Limited
- H&H Properties
- Hagan Homes
- Hayfield Homes
- Hill
- Hopkins Homes Limited
- Ilke Homes
- Kebbell Country Homes
- Kebbell Development
- Keepmoat Homes
- Kitewood Estates Limited
- Lagan Homes
- Life Less Ordinary
- Linden Homes
- Macar Developments
- Mandale Homes
- MCI
- Metis Homes
- Miller Homes
- MJ Gleeson PLC
- Morris Homes
- Morrish Homes
- Nicholas King Homes
- Norfolk Homes
- Orbit Homes
- Pat Munro Homes
- Pearce Fine Homes
- Pentland Homes Limited
- Persimmon
- Peter Ward Homes
- Prospect Homes
- Redrow
- Sigma Homes
- St Modwen Homes
- Stonebond Group
- Stonebridge Homes
- Taylor Wimpey
- Thakeham
- Thomas Homes
- Tilia Homes
- Vistry Group
- Waters Homes
- Weston Homes PLC
- Wheeldon Brothers
- Woodstock Homes
How to get a mortgage through Deposit Unlock
There are only a few providers that offer mortgages to people buying through the Deposit Unlock scheme – Nationwide, Accord, Perenna and Bluestone Mortgages.
You can find a mortgage broker online by using a directory like Unbiased.co.uk.
The MoneySavingExpert.com website also has a list of top mortgage brokers to choose from.
It’s worth noting that while the Deposit Unlock scheme allows you to buy a new build home, you aren’t eligible if you are planning to use the property as a buy-to-let.
Buy-to-let is where you buy a property to rent out rather than live in.
One major advantage to the Deposit Unlock scheme is that you usually pay less mortgage interest than you would signing up for a regular 95% loan-to-value home loan.
How to get the best deal on your mortgage
IF you're looking for a traditional type of mortgage, getting the best rates depends entirely on what's available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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