prospective First Time Home buyer

Jayman21

Hi All,

My young cousin is looking to get on the property ladder and is in need of help to understand the current housing market as it appears pricing are going up at an unbelievable rate. Currently searching for properties in the Surrey area about max 10 miles radius from Purley (as does not what to stay too far out of the London area).

1. Is this the right time to buy given the rise in prices?
2. With a deposit of 9,000 and on a job which pays 40,000 per year does he stand a chance to get a 4 bed house? bearing in mind that he is the only one with income in the home as wife does not work nor have a good credit rating.
3. What banks are best to approach for mortgage for first time buyers
4. Does not what to go the route of shared ownership / part buy part rent

Any other resources will be appreciate. Thanks in advance for your contributions.

Kind regards
Jay

sydenhambased

Answering your questions in the order you asked them.

1. Who knows? Particularly in and around London, prices are less likely to fall than to rise, but there probably will be some sort of a fall sooner rather than later. Nobody has a crystal ball though.

2. I've just taken a look on Rightmove for 4+ bed properties within a 10 mile radius of Purley. Absolutely nothing came up for less than £200k. There are 31 three bed properties currently available, two of which are houses (rather than flats).

For reference, with a sole income of £40k and NO other debt (credit cards, car lease etc.) he's probably looking at a maximum mortgage of £160k, and a £9000 deposit would therefore necessitate using the Help To Buy Scheme. You pitch in with a 5% deposit; the details are complicated but essentially you pay more interest every month in order to have a 95% mortgage that is partially guaranteed (to the lender) by the government.

3. It may be worth his while trying a whole-of-market (independent) mortgage broker.

Frankly £9000 isn't going to go far. On a (say) £150k property, one could reasonably expect to pay £1500 stamp duty (unavoidable), £500 survey, £700+ solicitor and that's without sorting out any niggles, furnishing the place or physically moving. Suddenly £9000 has become £6000 and then even with Help To Buy the maximum property price he could afford would be £120k.

I think his only real options at this point are to stay in rented accommodation and save a larger deposit, or go down the shared ownership route (though that has its fair share of downsides).

J_i_m

Jayman21 wrote: »

1. Is this the right time to buy given the rise in prices?

Forget the market, the market is going to do what the market is going to do regardless of your situation.

The right time to buy is when you can afford to.

But personally, If I were on £40k a year... (more than double what I earn ) then I'd stay where I am for a few years and significantly increase on that £9k deposit by saving my excess income.

Jayman21

@sydenhambased and @J i m Thanks for your response. Very useful advise. I will keep you posted

Jayman21

Hi All,

Can any one share what the down sides are going via the shared ownership route (part buy part rent)?

I know you pay rent on the % you do not own plus service charges and you have the monthly montage payments.

Also what are the best web sites or agents to check for properties (part buy part rent, new buy scheme etc) in the Kenley, Purley, Coulseden, whyteleafe and Caterham area?

thanks