How can first-time buyers budget to buy their first property in Surrey?

The finances are often the most problematic part of getting on to the housing ladder for first time buyers. It can feel like a huge leap to go from renting on a monthly basis to paying for a six figure property. However, with some careful budgeting and some smart thinking it’s entirely possible for first time buyers to buy their first property in Surrey.

Calculate your deposit

The deposit is the largest cash (as opposed to borrowed) element of a property purchase for any buyer. How much you will need will vary depending on factors such as the property cost, the mortgage provider and what you earn. As a general guide, you will need to have saved somewhere between 5% and 20% of the purchase price of the property as a deposit. For example, if you wanted to buy a home worth £200,000 then you’d need between £10,000 and £40,000. The more of a deposit you have, the lower the rate of loan to value you’ll need for your mortgage and the better the mortgage offers you will receive.

Look at the Help to Buy scheme

Help to Buy is a government scheme available to help anyone to get into a new home. You need just a 5% deposit for Help to Buy and the government will make up a further 20% in the form of a loan. This means that you’ll need a mortgage of just 75% of the property price, as opposed to 95% if you currently only have a 5% deposit. The scheme is available for new build homes all over the country and can make it much easier for first time buyers looking to budget to buy a first home.

Make sure you know all the costs of buying

There are a number of other costs that are part of the process of purchasing a property that need to be included in budgeting calculations, including:

  • Stamp Duty – currently, there is no stamp duty to pay for properties worth up to £300,000 for first time buyers and a reduced rate up to £500,000. For properties worth more, Stamp Duty will need to be factored in.
  • Legal costs – you’ll need to ensure that you have solicitors who can advise on the purchase process and review the documents.
  • Finance costs – when you’re arranging your mortgage, for example, there may be a fee to pay, as well as additional costs.
  • Survey and searches – when you begin the process of buying a home you’ll need to pay for a survey and searches to ensure the property doesn’t contain any nasty surprises.
  • Moving – a purchasers budget also needs to include items such as removals fees, new furniture and any storage requirements.

Calculate the costs of living too

When you’re budgeting it’s important to ensure that you’ll be able to afford the mortgage repayments that you sign up for. Bear in mind the need to pay for buildings insurance, as well as the cost of any decorating or redesigning you want to do with the interiors too. Finally, look at all your regular monthly outgoings and make sure the mortgage is affordable – this is something you’ll need to demonstrate to the mortgage provider too.

We have a wide range of properties in Surrey that are perfect for first time buyers – contact us to find out more.