Help to Buy is a particular government program that helps first-time buyers purchase a home. The Help to Buy scheme permits you to get a credit in up to 20% of the property assessment. The buyer needs to give a deposit of only 5% of the house's value in Surrey. Then, at that point, he gets a home credit to cover the rest of the housing cost. This program was available to everyone but starting from 2021, the government Help to Buy program is open only for first-time buyers.
Korter provides a special filter of Buying Schemes -> Help to Buy, where you can see all the properties that support the Help to Buy scheme in Surrey.
Help to Buy Surrey developments under this program includes only new-build properties. Using the scheme, the purchaser gets an equity loan, which is interest-free for the first 5 years. Then, he starts paying interest at 1.75% in the 6th year. The interest rate rises every year. The buyer has 25 years to fully repay the loan. In the event of a sale, the purchaser must repay the loan as well. Thus, in order not to pay high interest on the loan, it is better to try to pay the entire sum during the interest-free period.
It is vital to remember that the cost of the home affects the loan amount. What happens if property prices rise or fall? As your Help to Buy equity loan depends on the market value of your real estate, any change in its prices can change the amount you have to repay. If the value of real estate rises by 10%, then the interest rate that you need to pay rises following the already new value. It must be considered when deciding if you are going to purchase one of the Help to Buy Surrey properties.
|Example of Help to Buy in Surrey|
|Cost of the home is £375,000|
|Cost name||Percentage of total||£ value|
To participate in the Surrey Help to Buy program, you have to comply with the established rules.
|Region||Help to Buy price cap|
|South East (Surrey)||£437,600|
|Yorkshire and the Humber||£228,100|
|East of England||£407,400|
If the buyer does not have the total sum of money to purchase the new home, then the opportunity to buy one of the Help to Buy houses in Surrey through a government program seems tempting. But before deciding on this step, you need to know everything about all the points of the program.
|+ Total ownership. The purchaser owns 100% of the real estate.||- New residential complexes only. Help to Buy houses do not cover resale properties.|
|+ Very small deposit. The purchaser has to pay a deposit of just 5% of the value of the bought apartment.||- Regional value. In each region, set prices should not exceed the purchased house.|
|+ 5-year interest-free period. The purchaser can pay the cost of the home during the first 5 years and not pay interest on top at all.||- Not a fixed expense. If the real estate cost rises, the purchaser pays interest on the new value.|
|+ Family revenue does not matter. The purchase of Help to Buy real estate does not provide for maximum family income restrictions.||- Increasing interest. At the end of the interest-free time, the interest rate rises every year.|
|+ 25-year term to pay off the loan. You have enough time before you have to repay the loan in full.||- Remortgage is a question. A lot of remortgage deals are only accessible to those who have paid off their loan.|
|+ Small mortgage rates.||- Repair permission. Before you can start improving your property, you need to get a permit.|
If you decide to become a member of the Help to Buy program, here is a small guide on how to do it:
|Kent||from £407 / ft2|
|London||from £937 / ft2|
|Essex||from £415 / ft2|
|Hertfordshire||from £567 / ft2|
|Berkshire||from £456 / ft2|
|Buckinghamshire||from £581 / ft2|
|Milton Keynes||from £349 / ft2|
|Manchester||from £366 / ft2|
|Greater Manchester||from £334 / ft2|