Property prices in the UK fluctuate regularly but there is one notable exception to this rule - London. Aside from the occasional minor drop, prices in the capital tend to rise demonstrating the city’s continued popularity with home buyers and investors alike. London is a unique and diverse property location and as such it’s important to find out as much as you can about properties available. In this guide you’ll find valuable information about the housing market and how to successfully purchase a property within the capital.
1) Research the market: London is a vast, diverse city and some areas are more popular than others. Research online and find out as much as possible about the locations you’re interested in or talk to a local estate agent who should be able to answer any questions that you might have.
2) Check it works for the future: When purchasing a property don’t just focus on the present take into consideration your future plans too. For example, living above a nightclub might be acceptable as a young adult, but if you decide to have children in the future, would be distinctly undesirable!
3) Find out average prices: To ensure you’re securing a good price, find out what properties have previously sold for on the same street. Remember, if the area is being regenerated it may be worthwhile exploring the available options in that location as prices may be set to climb in the future.
As with any house purchase in the UK, when buying in London you will pay a number of one-off fees. It is likely that you’ll require a solicitor or conveyancer to carry out the relevant searches and legal work to ensure you remain within the law when buying. You’ll also need to pay Stamp Duty Land Tax if your property purchase exceeds £125,000. Other costs include survey fees, mortgage application fees, moving costs and building insurance.
Another option is to enter into a shared ownership arrangement with a friend, or enter a shared ownership scheme, where you purchase shares in your property over an extended period of time. It’s an effective way to get on the market on a limited budget but it is important to hire a solicitor to draft up an agreement if you’re purchasing with a friend to avoid future conflict.
The Help to Buy Scheme can be used against purchases of up to £600,000 and is available to all providing you are not planning to use the property as a second home or for rental income. Under the first phase of the scheme [for new-build properties only], the government will loan up to 20% of the cost, which means you only need a 5% deposit, plus mortgage to fund the rest of the purchase. The Mortgage Guarantee scheme enables buyers to purchase homes with a 5% deposit which is welcome news for those without the necessary savings in place.
If the more desirable London locations prove to be too expensive for your budget, look to the surrounding boroughs instead, such as Elephant & Castle and Southwark and parts of East London which are currently experiencing considerable regeneration. Kate Faulkner from Property Checklists comments: “Properties in these areas might not be exactly what people want, where they want, but it’s a start. Don’t forget that leveraging can be a good way of upgrading to the ideal house.” By investing somewhere cheaper, then selling at a profit, you’ll then be able to reinvest in a more desirable area.
Whether you’re a landlord or a home-buyer transport links are inevitably a top priority. Being close to the local underground station or bus stop is of paramount importance when you work in London and the shorter the commute time the better. In addition to finding out what your nearest transport links are find out about future plans too. For example; London’s £14.8 billion Crossrail development has created 10 new stations and upgrading a further 30 and runs from Reading and Heathrow in the west through to Shenfield and Abbey Wood to the east. The new Crossrail stations at Tottenham Court Road and Bond Street for example, will provide faster commutes for people in the surrounding areas like Waterloo and Covent Garden. Likewise, Docklands benefits from Canary Wharf’s new Crossrail link. If you buy a property close to a new Crossrail station you are not only likely to enjoy a shorter commute time but you will probably benefit from capital growth on your purchase too.
According to a recent report, nearly half of all London properties costing £1 million or over were purchased by foreign buyers. This has caused prices to climb upwards in certain locations but It is important to remember that property values differ significantly depending on which area of London you want to purchase in. For example areas such as East London and Bermondsey, covered by our Rotherhithe and Shad Thames offices are considerably cheaper than places like Kensington and Chelsea - but the recent regeneration of these locations makes them a worthwhile consideration for investment. When deciding where to buy, identify which areas are being developed – they are likely to be property hotspots of the future.
London’s population is rising rapidly. The latest housing in London report revealed that the population is predicted to reach 10 million by 2035. Unsurprisingly this has made prices rise in certain areas. The city remains appealing for buyers of all ages particularly property investors. At present, 21% of Londoners own their house outright and 26% rent privately – this figure are even higher in Central London. Therefore, if you’re looking for buy-to-let property you will enjoy high demand and a sizeable rental income. However, the government’s current focus is on providing more affordable properties for first home buyers and as a result, there are a number of new developments being built across the city.