Rising house prices and strict mortgage rules have made it difficult and impossible for youngsters and many alike trying to take their first step on the property ladder. However, it's not all doom and gloom! Here are seven tips for buying your first or second home in Surrey or London...
1. Property prices are on the slide
According to the UK house price index, first-time buyer homes in Surrey are 0.6 per cent lower than they were a year ago (2019), which shows us that property prices are declining, which will offer a window for first-time buyers to step up the ladder.
2. Research the cheapest areas to buy
Currently, the cheapest place to buy property in Surrey is in Surrey Heath. Here, you'll find the popular commuter towns of Camberley, Frimley and Bagshot. On average, first-time buyers are now paying £287,000 for a standard two-bedroom, two-bathroom flat within a mile of Camberley station with change to spare.
3. Take advantage of where the biggest price falls are
According to our research, Kingston upon Thames is facing one of the biggest price falls; first-time buyers in the area now pay four per cent less than they were just a year ago. A one-bedroom flat in the swanky Royal Quarter had been put on the market with Featherstone Leigh for £299,950. As it's located less than a quarter of a mile from Kingston Station and positioned right in the centre of town, it's a price you can't argue with.
4. Know your alternatives
Traditional property portals like Rightmove and Zoopla may make your eyes water and demotivate your search, but there are alternative sources and portals you can look to. For example, HM Government’s portal highlights new developments where prices are reduced through help-to-buy and shared ownership schemes.
5. Explore other opportunities
Shared ownership opportunities offer a cut-price route into home ownership. The way it works is that you buy a proportion of the property and rent the rest. However, it's suggested that you do your homework as there are many different variations of the rent-to-ownership ratio. For more information on how it works, go to https://www.helptobuy.gov.uk/shared-ownership/.
6. Be wise with loans
Did you know that if you buy a brand new home, you can cut the initial cost with a five-year interest-free loan from the Government? They will lend you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years. Requirements include that the home must be newly built with a price tag of up to £600,000. In London boroughs, a loan amount is up to 40% of the purchase price.
Or for advice and help to acquire a residential mortgage in London, click here.
7. Be clued up about schemes on offer
Government-backed savings or investment ISAs literally gift you money for every £ you save. They are set up through banks and building societies where they offer tax-free earnings. With a Help to Buy ISA the Government will pay you £50 for every £200 you save, up to a maximum of £12,000, so you could earn a maximum tax-free bonus of £3,000. Help to Buy ISAs are being phased out at the end of November in favour of the Lifetime ISA. With these, you can get a bigger bonus of up to £1000 a year if you save £4,000. The bonus is capped but the other advantage is that you can put up to £20,000 a year into the scheme.
Whereas a Help to Buy ISA limits you to £200 a month. The downside is that unless you use a Lifetime ISA to buy a property up to £450,000, you must keep it going until you are 60 or pay a hefty penalty to get the money out.
For more details on either of these schemes, visit https://www.gov.uk/lifetime-isa or https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-isa.
