Find out how and where to buy real estate in London, from average home prices to the cheapest areas.
Average house prices in London
The Capital of the UK, London, is the most expensive place to buy a home in the UK. According to the Land Registry, London’s average home price in December 2020 was £ 496,066, almost double the UK average of £ 251,500. If you are looking for flat for sale in London prices and its analysis, scroll down.
The Capital is also the most challenging place to climb a real estate ladder. The average price paid by first-time buyers in the town was £ 431,160 in December 2020, compared to £ 224,560 across the UK. According to Halifax, London’s 4,444 first-time buyers made a large average deposit of £ 130,357 in 2020. That was more than double the UK average first-time buyer deposit of £ 57,278.
Cheapest areas to buy
London is undoubtedly an expensive place to buy a home. However, real estate prices vary greatly depending on your buying district.
Barking and Dagenham
Cost of living in London
In addition to the cost of buying a home, you need to consider additional fees such as council taxes and commuting.
Each county has its council tax rate. This implies that you will have to pay significantly more in some areas than in others. For example, Wandsworth’s local tax rate is less than half that of Waltham Forest.
You can search for an interactive map to see average home prices anywhere in London.
Getting a mortgage for a London property
Getting a mortgage in the Capital can be a daunting task, especially if you are a first-time homebuyer.
Before looking for a home, think about how much you can borrow and determine what kind of real estate you can afford and how much deposit you need.
How much can you borrow?
The bank will give you a loan up to 4.5 times your total annual income as a rule of thumb. So if you earn £ 30,000 and buy it yourself, you can probably borrow up to £ 135,000. Buying with a partner for the same income doubles your borrowing capacity to £ 270,000.
Mortgage lenders also consider many other factors such as your creditworthiness, personal situation, debt, and average cost.
Online Mortgage Calculator can provide you with a rough idea of your budget based on your income. Although, you need to meet a broker for an accurate and personalized view of the amount you can borrow. It is helpful to consult.
Types of Properties difficult to mortgage
Some mortgage lenders impose strict limits on the maximum amount they can lend when you buy a new home.
For example, you may be limited to renting 85% of the value of a new home. Or 75% of an apartment compared to 90% or 95% of an old property.
Because of their compact size and niche demand, studio apartments can be a dangerous signal for lenders. So, they can be challenging to sell if they are ready to move on.
As a result, it can be challenging to get a studio apartment mortgage or additional criteria such as minimum space requirements.
Leases with a maturity of fewer than 80 years are often expensive to renew, resulting in loss of asset value.
Lenders may hesitate to take out a mortgage for a short-term rental property as it can be challenging to sell.
As part of the London Help to Buy program, new home buyers in the Greater London area can apply for an equity loan of up to 40% of the value of their property.
This loan is more generous than Help-to-Buy programs in other parts of the UK that offer up to 20% of the property’s value. With
London Help to Buy, you can pay a 5% deposit, borrow up to 40% of the real estate price from the government, and borrow the remaining 55% mortgage loan accepted by the lender.
London Help to Buy Equity Loans are available to first-time homebuyers and existing homeowners looking to buy a new home for up to £ 600,000. After April 1, 2020, only first-time buyers will be booked.
Expert and professional property investment agents in London are available to help people with the scheme process. You can access the online portals or find a suitable agent for yourself via word of mouth.