WHEN Joely Harris was furloughed at the beginning of the Covid crisis back in March 2020, she turned to baking cookies, cakes and brownies to keep her occupied.
What initially started out as a hobby soon snowballed into a booming business, helping her to save £10,000 in just seven months to help buy her first home.
By the time she had returned to her full-time job as a manager at a customer research company she was working gruelling 22-hour-days as she juggled her bakery business on the site.
At one point, she even took up temporary work as a receptionist for a month in order to boost her savings by a further £1,000.
But the hard graft was worth it, as she managed to tuck away at least £1,500 per month and move out of her mum’s house and into her new one-bed flat in March this year.
She paid £97,000 for her flat in the Isle of Wight – and now she lives just a couple of floors up from her sister, who bought a home in the same block.
We had a chat with Joely for The Sun’s My First Home series to see how she managed to become a homeowner.
Are you a first-time buyer who want to share tips on how you did it? Email us at [email protected] or call 0207 78 24516. Don’t forget to join the Sun Money’s first-time buyer Facebook group for the latest tips on buying your first home.
Tell me about your home
I live in a one-bed flat on the top floor of a block of six flats, just doors down from my sister.
It’s not a new build property – the scheme was built at least 100 years ago, maybe even more.
It’s open-plan, so I have a combined dining and living area, a kitchen, and a bathroom.
I love my high ceilings – it makes the flat feel light and airy. I have a big balcony too.
There’s enough room to take some of the dining and living room space and turn it into another bedroom, but I haven’t decided whether to do this yet.
How did you save for it?
It took me seven months to save for my flat despite being furloughed from my job in March because I started a bakery business.
I soon grew bored of doing nothing in the first few weeks of being furloughed, so I decided to bake a few cakes and cookies, giving them to friends and family.
When Easter came around, I started to be a bit more adventurous, making a platter of goodies for my friend which included cookie dough, brownies and cupcakes.
She said the treats were good enough to sell and lots of people had told me the same thing, so I decided to take the plunge and set up an online bakery business in July.
I wasn’t sure whether it would work out, but I thought I’d regret it if I didn’t try.
I didn’t know where to start when it came to setting the business up, so I asked my sister, who has her own pole fitness company, for help.
She guided me through all the fiddly admin, explaining how to pay for tax and register my business.
I didn’t rent kitchen space or anything like that – I made everything in my mum’s kitchen and used Instagram to advertise and sell all the treats.
It was really slow at first and I just got a handful of orders in the first few weeks, because no one knew what I was doing.
But it’s a close knit community on the Isle of Wight, so soon the word spread and orders began to stack up.
I had to invest £500 into my business to get it kick started, paying for ingredients and liabilities insurance – which would cover me should any customer get ill from eating my treats.
In the first few months I didn’t make a profit as I was paying all of that back.
But soon, I was getting up to 50 orders a day and making £1,500 a month, sometimes even more.
It came as a massive shock when work asked me to come back in September.
It was a massive struggle juggling my bakery business alongside my day job. I had a months’ worth of orders still to do, so I ended up working 22-hour days to fit it all in.
I would wake up at 4am and bake until 9am when work started, and then I would pick up baking again from 5pm until 2am some nights to fit in the orders.
But it was during this really busy period when I first started to seriously think about buying a house.
By this point I had made £5,000 so far, so I started to ramp up my savings.
I put aside another £5,000 I made from the bakery business over the next three months into my savings account.
I had worked as a receptionist at a local solicitor firm for a month over the summer too, so I put the £1,000 I’d made from that straight towards the deposit.
I saved up the remaining £3,000 I needed for my deposit by using savings I already had, and cut down on takeaways, clothes and any other purchases – like fancy food – that I didn’t need.
How much did you pay for it?
The house was up for sale at £100,000, and I bought it for £97,000 I paid a 15% deposit for it at £14,550.
Because I had been on furlough for most of the year, I was worried my application would be rejected by the banks.
So I decided to go to Halifax – who I’ve set up my business account with – because they knew my financial circumstances and could see how much money I was making from the bakery.
I went for a 30 year mortgage on a five-year fixed term rate and my mortgage repayments are £325 a month. My interest rate is 3.4%.
My normal annual salary is £22,000, but I was getting £300 less per month when I was on furlough.
So instead of getting £1,500, I was being paid roughly £1,200.
I made £10,000 from the bakery over seven months, and £1,000 from working at the solicitor’s.
I paused the business around mid-March while I moved into my new house, but I’m planning to relaunch it again soon.
Any profit I’ll make from this in the future will go straight into my savings so I can get a bigger property in the future – my full time job covers my mortgage repayments and bills.
How did you decide on the area?
My sister lives in the same block of flats as me, and it’s close to where I used to live, so I know the property and the area well.
When I saw it listed on Purplebricks, I thought I’d take a look at it, so booked a viewing.
I loved the flat and felt at home immediately, as it was so close to my sister.
Buying the flat means we can see each other every day – normally I’ll be down at her flat and we’ll spend evenings on her patio or up on my balcony chatting.
How did you afford to furnish it?
I’ve tried to spread out the cost of furnishing the house.
I had to buy some pricey things I wasn’t expecting. I was told the cooker and fridge would be staying in the flat, but when I moved in they weren’t there.
I’ve been buying things here and there for months, such as new plates one week and a new duvet the next.
At Christmas, my family bought me loads of essential furniture I needed. My mum bought me a new dining table, my sister got me a hoover, and my dad got me glasses, cutlery and cups, as well as an old sofa he had.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa – It’s a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there’s a maximum limit of £3,000 which is paid to your solicitor when you move. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
Help to Buy equity loan – The Government will lend you up to 20% of the home’s value – or 40% in London – after you’ve put down a 5% deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa – This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25% on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25% to 75% of the property but you’re restricted to specific ones.
Mortgage guarantee scheme – The scheme opens to new 95% mortgages from April 19 2021. Applicants can buy their first home with a 5% deposit, it’s eligible for homes up to £600,000.
My uncle gave me a spare microwave, and I bought my bed and TV with me from my mum’s house where I was living before.
I’ve tried to do up my house really cheaply, buying decorations from B&M and The Range.
What advice would you give to other first time buyers?
I would say that you need to keep focussed on your goals.
I was so frugal and smart with my spending decisions, but it was worth it.
My advice would be to look at your bank account every single day, and organise where your money is going. Set up an account where you can put your deposit into and don’t touch it.
I’ve learned from setting up my bakery business that you can do things you never would have thought you were capable of doing.
As long as you want to do it and set your mind to it, then you can make it happen.
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