Buying your first property can be a very daunting process, especially if you have decided to purchase your first home in the capital city of the UK. Before starting to look for a property seriously, it’s important to ensure that purchasing a property makes better sense than renting for you personally as it’s going to be one of, if not the most expensive purchases that you’re going to make in your lifetime.
What to Do Before Buying a Property in London?
Before you start the home buying process, it’s important to consider the pros and cons of all your options and bear the ongoing cost of maintaining the property in mind. Before you start the process, you will need to do the following:
- Save a deposit: You will need to determine how much cash you will be able to put towards the cost of buying a new home. Typically, the larger your deposit, the better mortgage rates you can take advantage of and the lower your monthly payments will be. Ideally, you should save a minimum of 10% of the property price, although some lenders will accept a 5% deposit. A deposit of 25% or above will enable you to access better mortgage deals.
- Get a Mortgage: Unless you are in a position where you can purchase a property with cash, you’ll need to get a mortgage. This is a loan from a bank or building society against a property that is paid back with interest. It’s essential for the majority of first-time buyers and the more research you do, the better. Search for the best mortgage rates and deals online, read online mortgage guides, and use mortgage comparison websites. It is also worth considering speaking with a mortgage broker who can access more competitive deals.
Is It the Right Time to Buy Property in London?
Although the world is in a state of uncertainty in 2020 due to the COVID19 pandemic and the effect it has had on the economy and our daily lives, it’s a good time for those who are looking to purchase a property for the first time. This year, national lockdowns have had a profound effect on the housing market, and although it bounced back well after lockdown restrictions were lifted in August 2020. In addition, a stamp duty holiday has been put in place by the Chancellor, Rishi Sunak, which is in place until March 2021 and is intended to help buyers who have been financially affected by COVID19 and improve the market in the aftermath. With many people in London looking to move on from city living and relocate to somewhere new after the events of this year, first-time buyers in London in 2020 have more options available to them with more property coming to the market compared to this time last year, and often at cheaper prices.
Why is Now a Good Time to Buy Property in London?
A worldwide pandemic might not seem like the best time to invest in anything, but it’s a good time to purchase property in London right now. First-time buyers are at an advantage right now thanks to more homes than average being brought to the market as national lockdown measures plus the stamp duty holiday in place until March 2021 encourage people to move out of the capital and relocate to somewhere else. The property market in London is currently booming with more opportunities than ever for first-time buyers looking to invest in a new house or flat.
Why is it a Good Time to Buy Property in London for First-Time Buyers?
Today, first-time buyers have more resources available to them compared to in the past, especially when it comes to buying property in London. The market is undoubtedly easier for first-time buyers today with schemes like Help to Buy and Shared Ownership making it easier for people to get their foot on the property ladder for the first time. If you opened a Help to Buy ISA before November 2019, you will be able to use it to make tax-free savings towards your first house deposit that will be topped up by the government. If you didn’t open a Help to Buy ISA before then, the Lifetime ISA is an ideal alternative that can be used in the same way, and you can also use this account to save for your retirement.
Is London Property a Good Investment Overall?
As one of the most populated cities in the world, London property is always in high demand, making it a worthwhile investment at any time. London property is not only worth investing in for somewhere to live yourself, but there are also several buy to let opportunities for first-time buyers looking to let property to boost their income. While you’ll likely need significantly more deposit to secure a buy-to-let mortgage, it’s certainly worth considering if you have the means due to the sheer number of renters in London. Investing in a large property to let as an HMO (house of multiple occupancy) can be an ideal way to earn money in the capital.
Is Buying Property in London a Good Investment for First-time Buyers?
While it’s a higher investment than buying in the rest of the UK, you can be sure that the high demand for property in London means that purchasing a house in this city is one of the best investments that a first-time buyer can make.
But is London Property Still a Good Investment?
In short, yes. The capital is a safe bet for investing in property even right now in a time of uncertainty due to events such as Brexit and COVID19. Whether you’re investing in property as a home, to sell on or rent out, London property is always worth investing in.
Why is Property So Expensive in London?
London is a popular city, and the cost of living is higher, affecting market prices. There are various factors affecting the price of properties in London including a limited supply, with house building across the UK failing to keep up with the growing population – and in London, the situation is even more acute.
Why Is London Property So Expensive for First-Time Buyers?
Simply put, a low supply of new homes coupled with a high demand for property in the area makes it one of the most expensive choices for first-time buyers. The overriding reason for high property value in London is the fact that people want to live there due to the job opportunities, transport links, and various other reasons that make the capital one of the most popular cities worldwide. London offers exclusivity that’s hard to get in any other UK city, which is what puts it in such high demand.
Where to Buy Property in London as a First-Time Buyer?
First-time buyers are often looking for affordable properties, which can be harder to come by in London compared to the rest of the UK. But it’s certainly not impossible! There are several areas in London that are ideal for first-time buyers looking for a bargain, with the DA18 postcode area at the top of the list with towns like Erith a popular choice. If you want to live closer to the centre of the city, Creekmouth, and Barking are ideal choices for the transport links, and Belvedere, Romford, Southall, Ilford, Enfield and Rainham all make excellent choices for finding the lowest average house prices in the city.
Is It a Good Time to Buy Property in London for Work?
While Brexit has brought home prices down, the job market in London is still booming, and those looking to move to the capital for work will find that it is a good time to buy a property in London to facilitate the relocation. First-time buyers who are currently working in London or planning to relocate to London permanently for work can take advantage of the lower market prices due to Brexit and the unusually high number of London homes on the market due to COVID19.
Is Now the Right Time to Buy Property in London?
The short answer is it depends on your situation. Investing in property in London is always a good idea with a high probability of a good return on investment whether you’re looking to sell your property in the future or are considering buy to let. Now is the ideal time to buy with lower house prices and more properties available, but whether or not it’s the right time will depend on you, your plans, and your current situation.
Who Owns the Most Property in London?
Who will you be rubbing shoulders with as a London homeowner? While London is home to many celebrities and top business people, the majority of the properties in the city are owned by wealthy landlords and investors from overseas. Qatar has become one of the biggest landlords in the city over the past few decades, now owning 24M square feet of real estate in the capital, including Canary Wharf.
Looking to buy for the first time in London? Get in touch to learn more about the range of properties we have available.