Renting in London is a money paradox that leaves thousands of young people struggling to save enough for a deposit after their monthly housing costs. But one couple have taken advantage of a new scheme that allows your monthly ‘rent’ to go straight into your deposit — all while you enjoy owning your new home.
Laura, 29, a senior brand and digital manager, and paramedic Sam, 28, were keen to get out of the renting trap.
They were trying to sock away savings each month living in a one-bed flat in East Croydon. “It’s obviously very expensive,” said Sam. “You fork out over a grand, pretty much half your salary, and then try to put £300 or £400 aside each month.” He felt lucky he was able to pick up overtime shifts, and they both had a Lifetime ISA (Lisa) to get the government top-up.
Their financial goal was to save £10,000 a year for up to three years. But while browsing online one day, they discovered a potential fast track. “We hadn’t saved our full deposit,” said Laura. “We were casually browsing to see what was out there in terms of our budget and just came across Dock28. We hadn’t heard about Save to Buy, but it seemed like it might be a good fit.”
Save to Buy is a first-time buyers scheme from developers Fairview New Homes. Following a pilot in Essex, Dock28 in Woolwich is the first London location to offer it. The premise is simple. You apply for a mortgage in principle and put down a one per cent deposit. If approved, you can move into their home and make monthly payments – pegged to the area’s average monthly rents and your own finances – to build up to a five per cent deposit. Once you complete, you switch to paying off the mortgage.
For Laura and Sam, they should complete around October 2024. Their one per cent deposit for a £400,000 two-bed was just £4,000, and their monthly payments are £2,000. The price point meant they were under the LISA cap of £450,000.
“Upon completion, we should have about a five per cent deposit ready to put down for the place,” explained Sam. “We'll sit down with our mortgage brokers and, finalise all the payments. We’ve done the bulk of the paperwork already in terms of conveyancing and stuff like that. We just need to sit and sign the dotted line for the mortgage.”
They won’t know exactly what fixed-rate variable plan they will get in October, but with a potential interest rate cut on the horizon it could work in their favour. “If it's similar to, or a bit more than, what we're doing now, then that's fine. If it's a bit less than happy days,” said Sam. “If it pans out to what they said it will be, we'll be saving about £300 pounds a month.” One caveat, they note, is that only a few mortgage providers currently accept the Save to Buy Scheme.
Once they complete with will also have to pay maintenance fees on the property, but currently they can enjoy the service for free. “Any issues we do have, they will fix as if we are paying that,” he said. “For example, our dishwasher didn't work when we moved in, and they got an engineer around and sorted it within the week.”
Dock28 being a new build scheme was part of the appeal for the couple. “There was no work required, everything was just pretty much ready to move into, and obviously higher quality,” said Laura. “That was a deciding factor for us.”
They’re also enjoying living in an area undergoing regeneration, with Elizabeth Line access and proximity to the riverside. “We really like it by the Thames,” says Sam. “It improves your mental health being a nice a bit of area to walk around.”
Unfortunately for London’s struggling would-be first-time buyers, there aren’t currently any Save to Buy plots left at Dock28. However, Fairview New Homes said that a number of homes due to complete in November 2024 could be designated as stock plots that would be eligible for the scheme.
As for Sam and Laura, they’re delighted to be out of renting. “It's money going into something that’s ours, as opposed to a black hole when it goes into some landlord's pocket making them a bit more comfortable.”
