We bought our £225,000 first home with a 5% deposit thanks to a little-known scheme – and we got £7,000 free cash too

FIRST-TIME buyers are finding it harder to get on the property ladder, but Jack and Jacob bought their home with a tiny deposit and even bagged some free cash.

Law student Jack and HR executive Jacob moved into their three-bedroom home in Coxhoe, near Durham in June.

The couple said dreams of home ownership were far from the top of their mind – until they found out about the Own New scheme.

It is run through Darlington Building Society and gives any homebuyer – not just those looking for their first home – a chance to buy a new-build property with only a 5% deposit.

Getting together a deposit is often the biggest challenge on the journey to owning a home.

Usually buyers need to come up with 10% of the property value, taking out a mortgage for the rest.

There are currently 60 homebuilders signed up to the Own New scheme, most of them in the north east of England.

The scheme is funded by the housebuilders, who pay a small fee on completion of the sale to the building society.

To take advantage, buyers just have to apply for a mortgage with Darlington Building Society and buy their home from a participating home builder.

If you don’t live in the area, you may be able to take advantage of the scheme soon as it is looking to expand, or find similar ones.

Buyers with a small deposit of 5% can use the government’s mortgage guarantee scheme to get a 95% loan-to-value (LTV) mortgage.

The initiative was originally due to finish at the end of 2022 but has been extended to December 31, 2023.

First-time buyers can use the scheme, as well as home movers, but the property you want to buy must be below £600,000.

Or the Help to Build scheme offers an equity loan to help you build a home or convert a previously commercial building.

Through the scheme, the government offers you a loan based on the estimated costs to buy a plot of land and build a home or buy a building to convert into a home.

And the First Homes scheme means prospective first-time buyers in England can get homes at a 30% to 50% discounted rate compared to market price.

But, if the homeowner decides to sell the property down the line, the discount on the new value will be made available to any future buyer too.

On top of the deposit help, Jack and Jacob also bagged £7,100 free cash towards their mortgage repayments from Barratt, the company which built their home.

To get a deal over the line, developers, builders and housing associations often give these kind of financial incentives if you’re buying a new build property. 

What freebies you can get varies on a case by case basis – it all depends on who you are buying from and how much they are willing to give you.

We sat down with Jack to chat about how he and Jacob went from being renters to homeowners for The Sun’s My First Home series.

Tell me about your home

It’s a three-bedroom, detached new-build in Coxhoe, near Durham.

There’s a driveway at the back of the house as well a back garden.

We have a separate living room and an open-plan kitchen and dining room.

There are three bedrooms upstairs – the master bedroom with an en-suite, a spare room and one that we use as an office.

How did you decide on location?

It would have been too expensive to buy a new-build apartment in Durham city centre.

Instead we chose to search for a new house in Durham as it is equidistant from my parents in Darlington and Jacob’s mum and dad in Stockton-on-Tees.

We spotted Barratt Homes’ Burdon Green development in Coxhoe and made an appointment to pop along.

How much was it?

Our house cost £225,000 and we put down a 5% deposit of £11,500.

We used Darlington Building Society’s Own New Scheme to buy our home.

It’s open to people looking to buy a new-build property with the building society within the local area.

Originally we had been offered a 40-year mortgage term with a different lender, but we weren’t keen on taking out a mortgage for such a long period of time.

We still would have needed just a 5% deposit, but the mortgage term put us off.

We then found out about the One New scheme through our mortgage broker and decided to go for it.

We were able to secure a 30-year mortgage term with a fixed rate of 5.2% for five years.

Our monthly repayments are £1,050, which we split equally between us.

How did you save for it?

Jacob and I first started saving in September 2022 with a view to getting a deposit together, but we didn’t have a particular time frame.

Between us, we tried to put away £1,000 a month, but sometimes we would fall short of this and we didn’t try to put too much pressure on ourselves.

We started to look for a new apartment to rent together in January 2023 as the lease on my student accommodation was due to expire.

When we were looking around, it suddenly dawned on us that maybe we should be looking at buying a home together rather than renting.

As soon as we came across the Barratt development, we decided to ramp up our saving efforts.

At the time I had a car on finance, which I was paying £500 a month on, which I decided to return.

I put the money that I was using to pay the car off into my savings instead.

I was also able to give the car up when I got a part-time, home-based job as an HR executive.

It also meant I wasn’t spending money on petrol, which made it easier to stick to our £1,000 goal.

Jacob and I were both living in my student flat, which cost £600 a month including bills.

I was covering this cost, which meant Jacob had more money to put away into savings.

We didn’t go on one night out between January and June in order to save cash, which was quite hard as a student.

As we approached our completion date, we had to be even more frugal to get ourselves over the finish line.

We cut back on our weekly shop, buying less treats and snacks and being more focused on ingredients and batch cooking to make our food last longer.

This allowed us to stick to our goal of saving £1,000 a month and even put away a little more to give ourselves the last push we needed.

Did you get any freebies with your home?

We got a financial contribution offer from our home builder Barratt.

It’s an incentive that they offer to help ease the homebuying process.

For every £20,000 of the purchase price of the property, they pay you £1,000.

It’s paid as a single lump sum made on completion, and we got £7,100 paid directly into our bank account.

We would have received a payment of £11,250, but part of that cash was used by Barratt to cover the cost of their enrolment in the scheme.

How did you afford to furnish it?

The house came with brand new integrated appliances in the kitchen and modern fixtures and fittings throughout.

We also had some furniture already that we bought with us to our new place, including a television.

There are still a few bits we need to get and we’re buying in stages to spread out the cost.

Shopping at outlet stores helped us to save cash.

For example, we got a dining table from a Barker and Stonehouse outlet that should have been £1,000.

We picked it up for £360 – a saving of £640.

What advice would you give to other first-time buyers?

Many buyers dismiss new build properties because they think they will come with lots of problems.

But if you do your research and read reviews online, you’ll make a good choice.

It’s been so much easier moving into somewhere that’s brand new, rather than buying a home that needs a lot of renovation.

Meanwhile, we reveal how one family used the snowball method to clear £26,000 worth of debt and buy their first home.

One savvy saver managed to put half of his wages away while still renting to buy his first home.

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