5 tips and tricks for buying a London home
Although buying property in London can certainly prove to be an incredible investment, the prospect of actually buying a house or flat in our great capital might, at first, feel nothing more than a pipedream. It’s no secret that property prices are steeper in London than anywhere else in the UK and, in the long term, it is likely that these prices will continue a steady incline. To add insult to injury, despite Britain’s recent record low unemployment rate of 5.1%, wage growth is virtually non-existent, so many of us are not yet feeling financially sturdy.
Regardless of how hopeless it may seem, for the determined among you, there are certainly ways and means of securing your dream London home. Below is a great list of tips and tricks to keep in mind when planning and researching real estate opportunities.
1. Don’t get scared off by average prices
Data collected in March 2016 showed that the average London property costs a staggering £534,785. When you compare this price to the average house price for areas outside of London (a much less intimidating £189,901) you would be excused for feeling deflated and somewhat pessimistic about your chances. What you might not know is that in London, ‘average’ values have become somewhat meaningless.
The range of prices in London has become so varied, from £228,000 to £1.2 million, that the average value has become skewed and unreflective of what is truly available. Chances are if you do enough research, hire an experienced estate agent and are mindful of the tips below, you can find the perfect house.
2. Location, location, location
London is a huge city and it’s constantly expanding. If you’re looking to find a property in London, be mindful of where you look and don’t completely write off certain areas if they don’t fit your criteria. Flexibility is key; there are secret pockets of London just waiting to be discovered. With developers constantly looking to reinvigorate the downtrodden areas of London, you may find a house in a currently underappreciated location that is destined to become the next most desirable neighbourhood in the city, putting you in an enviable position.
Croydon was once one of these ‘underappreciated locations’, but after a recent resurgence — thanks to its ideal transport links and the £1.4 billion Westfield/Hammerson development project — it has become a highly sought-after area. Of course, if you’re looking for a textbook example of an area that saw a significant boom, look no further than Peckham. The Sunday Times named it the second most fashionable area to live in the UK — a far cry from its reputation at the start of the new millennium.
3. Team up with a friend
If you believe that there is no feasible way that you can own a property solo, consider teaming up with a friend or family member. Some lenders permit up to four people on a joint home loan. Some parents even buy houses with their children, knowing that they stand to profit from the investment in the long run. Before you decide that this option is suitable for you, take careful consideration with regard to the individuals you chose to invest alongside. Remember that there will be a lot of pressure to stick to regular mortgage payments, and not all relationships can cope with the strain of this joint responsibility.
4. Start saving your money
Regardless of your ultimate game plan, you will need a deposit to get on the property ladder. This is why it is so critical that you begin saving. Thankfully, once you have a realistic and concrete financial goal, making a plan and achieving your desired outcome becomes so much more likely. Get an approximate estimate of the deposit you require for your dream home and set aside a certain amount of money each month. With a bigger picture in mind, you might even consider moving in with family to save substantial amounts of cash.
Research the best cash ISAs and savings accounts online; this important decision will make all the difference when it comes to how soon you can finally buy your London home. The government’s Help to Buy scheme is specifically designed to encourage and help first-time buyers. They work similarly to the traditional cash ISA, but with the added bonus that the government will top your balance by up as much as 25% —- up to a maximum of £3,000 on £12,000 savings.
5. Shared ownership
One great option is that of shared ownership with a housing association. You buy a proportion of the property (a minimum of 25% and a maximum of 75%) and you pay rent on the remaining share, which is typically a maximum of 3% of the value of that share when the house was sold. As a downside of shared ownership, people often cite the possibility that the house may ultimately be harder to sell than a conventional property. However, with interest in the London property market continually growing, this isn’t a pressing concern for most. Of course, there are also a number of other government schemes for buying property, all of which have their own appeal.
For help getting you your first London home, get in touch with the Fish Need Water team. We’re a modern estate agents in East Dulwich, and we’d love to assist you in navigating the tricky world of real estate.