Stamp duty exemption to help first-time buyers, but what about deposits?

But one couple determined to save for their first home are now counting down the days to moving in after taking drastic action: cutting out shop-bought coffees on the way to work.

“We set ourselves a deadline when it came to buying our home, so when we were saving we had a plan in place,” says Elisha Marsland, 26, a self-confessed “big-time shopper” who admits she always enjoyed her morning latte.

She and fiancé Mike Kirkham, 32, took just 12 months to save a deposit for their new home in Greater Manchester: “We cut out buying things like a coffee on our way to work and we also reduced our date nights from once a week to once a month,” explains Elisha.

“I even created a spreadsheet so that we could keep track of our savings and make sure we were on target for making our home buying dreams come true.”

Now the couple plan to marry in November and move to their three-bedroom new-build house at Countryside’s Blackberry Vale site in Brinnington before the end of the year.

“What sold us on the home was the kitchen and the skylight windows,” says Elisha.

“I fell in love; but we genuinely thought that the home was out of our budget because it looked so luxurious. You can imagine our joy when we realised we had a big enough deposit.”

The couple used the Government’s Help To Buy scheme, which requires just a five per cent deposit.

Once buyers have the minimum deposit the scheme offers a 20 per cent government loan so that buyers only need a 75 per cent mortgage.

The loan is paid back on the sale of the property, or at any time earlier. Help To Buy was introduced to aid first-time buyers but is now available to people who have previously owned a home but don’t any more – although only for properties under £600,000 in England, £300,000 in Wales and £150,000 in Northern Ireland.

Scotland has different rules.

Keen to encourage would-be home-owners to set up savings accounts, even Post Office Money has issued a set of new year savings tips, including setting a goal like Elisha and Mike did.

Owen Woodley, managing director of Post Office Money, says: “Saving for a deposit is undoubtedly one of the biggest hurdles many will face. However, 65 per cent of prospective buyers also underestimate the cost of moving. Therefore, setting a savings target early is important to keep you focused and on track.”

According to Comparemymove.com, the average cost of moving for first-time buyers in London is £7,765.

Although they don’t pay stamp duty on homes under £300,000 (£500,000 in London), higher prices in the capital mean some stamp duty may have to be paid (an average £5,989).

Costs also include conveyancing, surveys and removal services. London’s £7,000-plus figure compares with an average first time buyer’s moving cost of £1,586 in England, £1,531 in Wales and £1,331 in Scotland, says Comparemymove.com.

Post Office Money advises monitoring your spending, so you can identify where to make savings, and using a mortgage affordability calculator, such as the one on postoffice.co.uk, so you know how much you can borrow based on your earnings.

“Before getting a mortgage you will be credit checked, so now is the time to check your own credit report and ensure all the information it contains is accurate and up to date,” says Woodley.

“Plan now to start paying down any outstanding debt, be sure not to miss any agreed payments on utility bills or mobile phone bills and try to make more than the minimum repayment in the six months prior to your mortgage application.”

Elisha Marsland and Mike Kirkham are delighted to have successfully steered through the obstacle course of first-time buying at Blackberry Vale, where there are still homes available through Help To Buy from £159,995 (0161 464 3664; blackberryvale.co.uk).

But for now, says Elisha: “What I’m really excited about is hosting a celebratory gathering in our new open-plan kitchen and dining space. It’s Mike’s birthday in December so I’m looking forward to planning a big party.”