London house prices remain fiendishly high compared to the majority of the rest of the UK, making buying in the capital seem like an impossibility.
There are, however, various ways to get on to, and move up, the London property ladder.
Here, we check out the cheapest areas to purchase a home or flat in London, the government housing schemes that will help, and be it worth widening your search area to find the home you've always dreamt of.
Cheapest areas to buy in London
Despite having the UK's priciest house prices, some regions of London are much cheaper than others.
Previously the place to find the long-lasting Ford car plant which inspired the film Made in Dagenham, Barking and Dagenham may be the cheapest local authority in London, with an average property price of lb300,518. (If you're interested, the vehicle plant closed in 2002 after reeling off its final car, a cherry-red Fiesta.)
Birthplace of singer-songwriter Kate Bush and once home to children’s author Roald Dahl, the neighborhood authority of Bexley may be the second-cheapest place to purchase a home. The typical property there costs lb341,784.
The local authority of Newham – home of the Olympic Park, which hosted the 2012 London Olympics – is the third-cheapest place to buy a house in London, having a lb365,182 average property price.
The graphic below shows the ten cheapest places to buy a house working in london.
Most expensive areas to purchase in London
Kensington and Chelsea is among London's most affluent areas, and its popular locations include Knightsbridge, South Kensington and Portobello Road. Unsurprisingly, it came out because the priciest place to buy working in london with an average house cost of lb1,238,614.
With a likewise eye-watering average of lb1,028,141, the town of Westminster arrived because the second-most expensive area to purchase a property. Westminster it's home to the Houses of Parliament and also includes famous landmark locations such as Soho and Victoria.
Home to one of London's most well-known markets, Camden is the third-most expensive borough to buy property working in london, with an average property cost of lb821,238.
The graphic below shows the 10 priciest areas to purchase property in London.
Getting a mortgage in London
In to obtain a mortgage, you'll generally require a deposit of 5-10% of the property value. This is often extremely hard in order to save up for especially if you are planning to buy in London, but there are steps you can take to speed up the process and boost your deposit with a government bonus – see our guide on how to save for a mortgage deposit to find out more.
Alternatively, a 100% mortgage could allow you to buy without any deposit at all – but you’ll need a parent or close member of the family to guarantee the debt, and these kinds of mortgage are pretty rare in the present market.
As an over-all rule, mortgage brokers are allowed to let you borrow up to four-and-a-half times the quantity of the annual income, and also the annual salary of other people you’re buying with.
They’ll have a number of additional factors into account too, including your creditworthiness, debts you currently owe, average spending as well as your personal circumstances.
When deciding just how much to lend to you, many lenders will appear at the household bills, recent wage slips and bank statements prior to making a choice. Some lenders use automated systems, while some manually underwrite the loan – meaning they may be available to considering exceptional circumstances.
It’s well worth talking to an impartial large financial company for advice on the lenders who're most likely to say yes, in addition to tips on getting your credit record into the best shape possible prior to making a credit card applicatoin.
Schemes to help you buy a home in London
In an offer to assist more people buy homes in London, along with other parts of the united kingdom, the federal government has launched several housing schemes including:
London Assistance to Buy
Under the London Assistance to Buy scheme, people purchasing a new-build home in Greater London can use for an equity loan of up to 40% of the property's value.
This implies that place down a deposit of 5%, borrow up to 40% of the property price in the government, and take out a mortgage around the rest – potentially unlocking better rates of interest and enhancing your chances of getting accepted by a lender.
London Help to Buy equity loans are for sale to both first-time buyers and existing homeowners looking to buy a new-build property worth lb600,000 or less. The loan is interest-free for the first 5 years, but after that you'll have to pay a monthly admin fee, starting at 1.75% from the loan.
You'll need to repay your equity loan entirely after Twenty five years, whenever your mortgage term ends or whenever you sell your home – whichever happens first.
Shared ownership
Shared ownership allows you to buy a share which is between 25-75% of the property and pay rent on the rest.
It's made to help individuals with small deposits minimizing incomes get on the home ladder.
Some shared ownership schemes permit you to increase your share later on, referred to as 'staircasing', enabling you to build towards full ownership.
Rent to Buy
Rent to Buy was brought to help people buy a home, even if they don’t have sufficient of a deposit.
The scheme allows you to rent a house at 20% underneath the normal market rate for approximately five years.
During this time you’ll obtain the option to purchase the whole property or part of the property through the shared ownership scheme.
The way to obtain Rent to Buy properties happens to be limited.
Commuter towns: buying outside of London
Londoners are fleeing the capital in record numbers in search of cheaper property prices along with a different life-style. In 2022 alone, Londoners purchased lb30 billion price of property away from capital, the greatest level since 2007, according to estate agent chain Hamptons International.
More than three-quarters of Londoners leaving the capital gone to live in the South East, South West or East of England.
If you’re willing to live a little further afield, it’s important to factor the price of commuting to your budget, to make sure that the possibility saving you’ll make on the price of your home is not offset by rail fares.
It’s worth testing the commute of anywhere you plan to reside, in addition to checking it wouldn’t involve using one of the UK’s most-disrupted stations. Our research into the best and worst train companies says Southern Railway, Southeastern and Thameslink are among the worst rated operators.
The table below shows the average house price and train fares along with the average journey time and frequency for a number of London commuter towns.