A guide to buying property in London
Buying property in London can be the opportunity of a lifetime, but it is rarely simple or straightforward.
You have to research the market thoroughly if you want to track down your dream home and buy it at the most appropriate price.
But there are plenty of opportunities out there. You just need to know where to look, what to buy and be clear about your budget. Every penny counts in a competitive market. In the current environment, many London vendors are having to be realistic about accepting offers below the original asking price.
So here is our new London buying guide for anyone thinking of trading-up, leaping on the housing ladder or relocating to the capital.
1. Buying basics
Start by identifying one, or, at most, two areas which tick the right boxes in terms of price, type of property and transport links. London is too big a city to adopt a scatter-gun approach. Think of the capital as a large cluster of villages, then find the village that suits you best.
2. Watch this space
One of the quirks of the London market is how property prices in two areas that are physically very close can diverge dramatically. This is usually because one area is very fashionable while the other is less so. If you want value for money, consider up-and-coming areas, rather than necessarily just the most established ones.
3. London house prices
Once you have found an area to target, research current property prices. Don’t just look at the asking price. One of the most reliable guides to a property’s value is to find out what similar properties have sold for in the past, especially the recent past. This data is available through the Land Registry at OnTheMarket.com.
4. Stay on the radar
In a competitive market, try to stay ahead of the game. OnTheMarket.com features thousands of new properties each month, 24 hours or more before they are advertised on Rightmove or Zoopla.* So if you’re looking to buy, give yourself a head start and set up a property alert today here. Also, maintain strong relationships with carefully selected estate agents in your target area. This will ensure that you are the first person they contact when a new property comes on the market. And stay in touch, maybe dropping them an email or calling the agents regularly. This all shows you are keen, committed and serious about buying.
5. Need for speed
Find time to fit viewings into your schedule. It might be an early morning viewing, during lunchtime or after work. Some people save-up their viewings until the weekend but if you are able to view a property when it first comes on the market, this will put you ahead of the competition. There is nothing worse than receiving a call or email, informing you that your perfect property is already under offer. Also, it’s a good idea to have an ‘Agreement in Principle’ in place which certifies how much a mortgage lender will allow you to borrow. Having this secured can help to save valuable time if searching for property in a competitive market and it makes you stand out with agents and vendors as a reliable purchaser.
6. Period property or new-build?
If you are a first-time buyer in London, you will almost certainly be looking at flats rather than houses. It is an enormous market with all sorts of sub-markets within it, from new-build apartments to converted period properties. And if you want to narrow down your search, decide from the outset what type of property and the minimum number of bedrooms you prefer. Buying property is often about making compromises but set some non-negotiable criteria, too.
7. Leasehold or freehold?
Many London flats are leasehold, so make sure you understand the length of the lease. Properties on very short leases may be harder to re-sell later, though they may also provide the opportunity to extend the lease in the future. You should also be sure that you understand service charges, especially in new-build or porter-serviced blocks, also checking about future works being planned for the building. Research for such a major purchase is everything.
8. How low can you go?
Most experts agree that most areas of London are currently a buyer’s market with demand exceeding supply and with an element of uncertainty among vendors and purchasers alike. There is currently a significant gap between asking prices and what buyers are prepared to pay. So, don’t be embarrassed to haggle when putting in an offer. In fact, if you omit to haggle, you may end up out of pocket if you sell down the line.
9. Buying on a budget
If you have a limited budget but are determined to buy a house rather than a flat, you will probably need to target some of London’s outer boroughs – such as Barking and Dagenham, where there are many more affordable terraced houses. The average price for such houses is around £315,000. Croydon, where the average terraced house costs just over £350,000, is another good area to target.
10. Family matters: the school run
Expect to pay a premium in areas with good schools. Parents with small children often target areas specifically for their schools, so whether or not you fall into that category, time spent studying catchment areas and Ofsted reports is never wasted. Areas with good transport links also attract a premium, for obvious reasons.
11. Take a long-term view
If you are a first-time buyer in London, your main challenge may well be saving for the deposit. “Getting on the property ladder in London is harder than ever, so first-time buyers need to consider forgoing small luxuries, such as foreign city breaks, which will pay off five years down the line,” says Stephanie McMahon, Head of Research at Strutt & Parker.
Paul Smith, CEO of haart estate agents, agrees: “First-time buyers are coming back to the market in a big way, encouraged by the government’s stamp duty cuts”. And this new wave of buyers will need help navigating the fast-changing London property market.
Most experts seem to agree that, although it is a competitive London market, there are plenty of properties to tempt serious investors, first-time buyers and those looking both to trade-up or to down-size.
Get to grips with the nuances of the London market and you could make a purchase that will stand the test of time – as well as owning a place of your own in one of the world’s greatest cities.
Content provided by OnTheMarket.com is for information purposes only. Independent and professional advice should be taken before buying, selling, letting or renting property, or buying financial products.