How I bought a house with an income under £16k
By Erica Crompton
The sunset glows red. I’m sat on the end of my double bed. With a glass of Chianti, I look out over the lilac tree outside and across the bowling green and feel a tremendous sense of achievement as I take it all in. It’s bang-on 9pm and the moment is punctuated by the hourly peel of the church bells just at the end of my street. I’m here in a village just outside Newcastle-under-Lyme, Staffordshire, and have just moved into this little white cottage I’d been thinking about buying for the last 6 months.
Perhaps I feel so accomplished as just months ago I thought I’d be back in the ghetto of shared flats and tiny, rundown bedsits. I’d found myself exceedingly daunted and desperate: I was newly single, on benefits and selling my shared home with the ex as I approached 40. How was I going to make it on my own? How was I going to survive on a mix of self-employment and Universal Credit that totalled just under £16K per annum? I found myself counting every penny I’d ever saved, been awarded, earned and made over the previous five years. As I began to look at both renting and buying I realised I was going to have to be smart.
The first port of call were the banks to see what I could raise in a mortgage. I found that many banks wouldn’t lend more than the value of a two-man tent to live in, let alone bricks and mortar. £2K was the first mortgage I was offered from Santander. I felt pretty angered by the advisor sat in front of me. It felt like a ‘computer says no’ moment as she imputed my life savings into her computer and then turned the screen to me to reveal the pitiful mortgage figures on offer.
But I decided to persevere and speak with some more banks. I was right to. HSBC and Natwest could offer substantially more to those on low-incomes. One of the biggest discoveries was that I could count all my state benefits towards a property (Universal Credit and Personal Independent Payment). I got a mortgage in principle for £63K from Natwest. I was in business – there are of course areas outside of London where you can easily buy a new build, one bedroom flat for £50K.
I had left a glittering career in fashion writing in London over a decade ago as renting had become so expensive. My £23Kpa Blue Chip job wasn’t enough to live on. I was approaching 30 and only able to afford flatshares in the city. So I made the move to my parent’s home town, Stafford, in 2009 for more affordable housing as well as a slower pace of life. I had also racked up £7K debt while living in the Smoke.
It has not been easy. I’ve forfeited a decent regular job and fell unwell with psychosis shortly after the move to Stafford. Since a spell in hospital I rely not just on self-employment but also state benefits, because I can’t work full-time for more than several months a time.
But I saved, and worked when I could. As I started looking at properties I could afford it felt like I was discovering that ‘every penny helps’.
By the time I sold the house I shared with my ex I had scrimped together a substantial deposit from a year working part-time as an online comment moderator, working from home for a national newspaper. Here I took home £1870 a month for around one year. I shared rented accommodation in a cheap part of Stoke-on-Trent (but not the cheapest) at the time and my outgoings were no more than £1000 a month so I was able to put away £870 every month for a year. I had some surplus student loan from a year studying at the local university totalling £6K and a further 7K from working from home 3 days a week as the editor of a journal during a 7 month maternity cover.
That income, plus about £2K profit from the home I was selling and a further £5K from various freelance jobs gave me a deposit of £30440. So, I could afford a property around the £90K mark and a mortgage of just over £230 a month (much cheaper than the rented properties I’d seen at £650 a month).
Perhaps the biggest challenge I have faced in my journey onto the property ladder is other people. Friends and boyfriends have all put their hats in the ring with bad advice. “Don’t ever claim benefits even if you’re entitled – it’s shameful,” was one boyfriend’s advice. Another girlfriend, now ex-friend, reprimanded me for staying in one night, instead of going out with her. I was trying to pay off debts accrued in London, but according to her I needed to deal with debt as a modern aspect of everyday life and accept it. Another partner constantly reprimanded me for ‘being mean’ with my money as I diligently clocked up pennies for a rainy day.
It’s felt like such a remarkable achievement to get on the property ladder and even sweeter proving the naysayers wrong. I’ve had plenty of rainy days holed up in my little cottage since I moved here aged 38 in 2019. For just £87500 it’s afforded me the solitude I needed after all those people butted-in in on my finances. I’ve come to realise that if it’s a property you want, and you can stay focussed on your goal, it will come right in the end. I’m now aware that all the pounds I make contribute to bigger pots of money. I’ve also learnt that by being honest about my finances with others, I’m able to be honest about my finances with myself and this means I’ve been able to set achievable goals.
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