Buying a Starter Home in London? This is What You Need to Know
Getting started on the UK property market is already a daunting prospect in itself, but this becomes doubly tricky when searching for homes in the British capital.
House prices in London are among the highest in the world, with the average buyer spending around £614,000, compared to £231,000 for the UK as a whole.
As well as the eye-watering cost factor, navigating the London property market also comes with its own unique set of challenges and rules. If you’re a first-time buyer in the capital, here’s what you need to know to get off to the right start.
Location, Location, Location
In a city as big as London, location is the first, second, and third most important factor when choosing a home. As a rule of thumb, properties are most expensive in the centre and will decline in value the further out you go. Properties close to tube and Crossrail stations are also much more expensive. Make sure to focus on your commute rather than proximity to the centre, as living next door to M&M World is no good if your office is in Croydon.
Always Use a Broker
The written and unwritten rules for buying a home in London can seem like a minefield to a first-timer. Being uninformed also means you run the risk of paying much more for your mortgage than if you had expert advice on where to find the best deal for you and your needs. Always consult a mortgage broker before you begin your property journey. These days, Londoners can always save time and money by simply avoiding broker fees altogether and using an online mortgage broker like Trussle, who will navigate the best deals on their behalf.
Government Assistance is Available
If getting your foot on the property ladder seems like an unattainable feat, remember that government assistance is readily available. Help to Buy schemes are more popular and accessible than ever before, allowing you to save money through plans such as shared ownership schemes, ISAs, and equity loans. These options are extremely common among first-time buyers and could well be just the kind of assistance you need to get you firmly on the property ladder.
Your Deposit May Be More Than You Expect
Unfortunately, it’s not just the properties themselves that come with hefty price tags. Unlike most of the UK, where a deposit rarely goes above 10%, a deposit for a home in London will most likely be at least 20% and could go as a high as 60% in certain areas. That means if you want to buy a home for the average asking price in 2019, you would likely need to have a deposit of around £122,800 ready to spend.
Focus on the Long-Term
Anyone buying property should remember that their home is not just a place to live, it’s an investment and one of the most valuable things you will ever own. As such, it is important to consider choosing a home that is most likely to increase in value. This means doing your research and finding out which areas are predicted to become more in-demand in the future, as well as choosing properties that are likely to stay in good condition for the foreseeable.
Buying in London may be a hassle, but it’s certainly not impossible. With the right resources and knowledge at your disposal, buying your first home in London will be a breeze.