London is an incredibly diverse city, with a complex transport system and an abundance of green spaces. The property market in London is booming again, with the capital being the most-searched location for those looking to buy a home in 2022.
The region is a great place to plant roots and there are plenty of new-build properties becoming available in London each year. There’s no denying that London is one of the most expensive places to live in the UK, but purchasing a home here is achievable, even as a first-time buyer.
This guide will summarize everything you need to know when buying your first home in London and help you get that first foot on the property ladder.
How can you get your finances in order?
The amount you’ll be able to borrow through a mortgage – and the ability to have your application approved – will depend on your financial situation. First things first, you need to assess whether you have any outstanding debt that should be paid off. You will also need to check your credit score is adequate, otherwise, lenders may not be confident in your ability to pay your mortgage off.
Saving up as high a deposit as possible will see you well; it may help to reduce the interest rates on your mortgage or increase the amount you can borrow. In London, this is important given the average deposit for a first-time buyer here in 2021 was over £100,000, compared with around £50,000 for the country as a whole.
Also, make sure that you are not asking for more than you can pay back. You need to see whether your income is currently high enough to afford the repayments. If not, you may need to start saving more money or opt for a neighbourhood with more affordable housing.
What schemes are available to help first-time buyers?
The Help to Buy scheme has been operating for a few years now and is a great way to help first-time buyers afford a property. The scheme allows you to borrow an equity loan of up to 40% of a new-build property’s buying price in London. You just need to provide a minimum deposit of 5% and get a mortgage to cover the rest.
There is also the Shared Ownership scheme, which involves you buying a certain percentage of the property and paying rent on the rest – this is usually owned by a housing association. Whilst this option is a great way for first-time buyers to afford a property, you need to consider whether it is actually right for you.
Where areas are ideal for first-time buyers?
There are numerous areas in London that most people would dream of living in but these come alongside a hefty price tag. Still, there are some great areas that have a lot to offer and are much better value. When choosing an area, don’t just factor in your budget. You’ll also need to consider lifestyle costs, your workplace and any future plans you have.
Tottenham
For a zone three area, Tottenham is very well connected and you can easily reach central London within 30 minutes using the Underground services. It is one of the capital’s best up-and-coming areas, with billions being spent on new investments and station upgrades.
Greenford
Located in West London, Greenford offers first-time buyers a selection of 20th-century homes and conversions that are below the stamp duty threshold. Its location between Wembley and Southall means that you aren’t far from Heathrow Airport and can easily reach central London using the Underground network.
Wandsworth
One of the safest boroughs in inner London, Wandsworth has had recent residential developments. Lots of first-time buyers and young professionals have taken interest in the area as a result and it has one of the lowest council tax rates in the country.
Wembley
You don’t need to be a sports fanatic to love living in Wembley. The area is one of the more recent neighbourhoods to have benefitted from financial investment and has quickly turned into a popular spot for young professionals. It is well on its way to becoming one of the most high-profile property investment opportunities in London.
