Park & Bailey’s top tips for first time buyers in Surrey.

Here on Park & Bailey, we are going to explore some of the ways to make buying your first Surrey home easier.

Saving Money for Your Deposit

Generally, you will need to save between 5 and 20% of the cost of a home you’re looking to buy. It’s wise to look at properties to get an idea of how much deposit you will need, once you have a figure in mid you can start to save your deposit.

You should be realistic about how much deposit you will need, and plan to reach this goal. Regular saving is more a lot more effective than relying on irregular one-off sums.

Help to Buy

Don’t worry, even if you do have a small deposit, the Government’s Help to Buy scheme makes it possible to buy a new or existing home. With Help to Buy there are two options available: equity loans and mortgage guarantees.

However, there are limits on the cost of property you can buy using both of these schemes. To find out more about these schemes, check out this Money Advice Service’s guide to Help to Buy.

Help to Buy ISAs

Designed to help first-time buyers, the Help to Buy ISA scheme can help those who are buying a new home, save up for their deposit. This scheme means the Government will increase your savings by 25%.

Although, the most the Government will contribute is £3,000, so the maximum you can save towards your Help to Buy ISA scheme is £12,000. The ISA’s are for each FTB, not per property. So, if you are buying with another person, you van receive £6,000.  

Shared Ownership

Aimed at mainly first-time buyers, Shared Ownership is a cross between renting and buying. This works by buying a share of home from the landlord, meaning you only rent the part you don’t own at a reduced rate. In this case, the Landlord is usually your local council or housing association.

People aged above 55 can benefit from this, as these schemes are designed to help people who don’t earn enough money to buy a home outright. Those with long-term disabilities can also consider applying.

However, to be able to pay for your share, you will have to take out a mortgage. Normally, this is between 25% to 75% of a properties’ value. After this, you will have to pay a reduced rent on the share you don’t own.

Right to Buy/Right to Acquire

Right to Buy enables council tenants who qualify, to purchase their council home at a reduced rate. Depending on where you live and the type of property you want to buy, the size of discount may vary.

Those who qualify will most likely need to have rented their local council or housing association for at least three years.

Guarantor Mortgage

A Guarantor Mortgage may be possible for those who are lucky enough to have parents, relatives or friends who are willing to help. The guarantor will be responsible for any mortgage repayments you may not be able to fund.

Having said that, these kinds of mortgages can come with risks. The Guarantor’s role is extremely important, as they are liable for the loan you default and start missing payments. This may affect them in the future, due to a decrease in credit score, making it harder to borrow in the future.

Buying with Friends or Family Members

As property prices continuing to rise, buying with a friend or family member can be a great way to get onto the property ladder, you’ll also be sharing the costs of the deposit, mortgage repayments and maintenance and you can also look to get a larger mortgage than you would normally be able to alone.

However, it does come with potential risks, if one party is paying more deposit than the other. There also may be disputes further down the road.

If you have any questions or queries about buying a Surrey property, our team would be more than happy.

Please contact us on our website here.