A pound;113,500 mortgage at 26

7th May 2004 at 01:00
In her first few years of teaching, Catherine Marshall has been able to buy her own home - thanks to the Government's starter home initiative (SHI).

Ms Marshall, 26, who teaches languages at Mill Hill county high school in north-west London, says: "I was sharing a house in Finchley with two others having found it through Loot. It was pretty grotty, like being in student accommodation.

"If you want a nice place to live in London, it's extortionate. We paid pound;350 a month, which is really good for London; you'd be paying pound;500 for something decent and you wouldn't be saving anything."

When Ms Marshall started in teaching she was earning pound;19,000 (including pound;2,000 London weighting). After three years, she's earning pound;21,000 and she has been able to buy a one-bedroom house which is a 25-minute commute from junction 22 of the M25.

Ms Marshall bought the house in the village of London Colney just outside St Albans through the metropolitan home ownership SHI scheme, getting a loan of 25 per cent of the value of the property. When she sells, 25 per cent of the proceeds must be paid back.

It cost Ms Marshall pound;113,500 for the 1970s house, which has one bedroom, kitchen, lounge and bathroom. She borrowed pound;29,000 through the SHI scheme for a deposit and got a mortgage to cover the remaining cost which she plans to pay back over 35 years to keep her repayments down to pound;407 a month.

"If I hadn't taken the mortgage out over 35 years my repayments would have been pound;500 a month, which would have been a struggle," she says.

"Aside from that, my bills are practically nothing and so it is not really costing much more than my rent was."

Ms Marshall has been able to get on the property ladder so quickly because she has not built up massive debts. She still owes pound;5,000 of a student loan which she is repaying at pound;90 a month.

The Cambridge University graduate began her teaching practice with a pound;1,500 overdraft, but opted to train in Suffolk so that she could live with her parents and not pay rent. Ms Marshall is pleased to have found her own home, but warns of a drawback: "You would have to stay here until you could buy with someone else or go to somewhere cheaper.

"When I leave here I have to give back 25 per cent of the sale price. In 10 years' time, if I am not in a position to move with someone else, I might find it restricting."

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