Taking that first step onto the London Property ladder is an attractive prospect for many, especially young professionals. However, for those who aren’t savvy with the process, buying a property can be an extremely intimidating prospect. With gargantuan deposits and large financial costs needed to buy a property in the capital, new buyers need to understand the full picture.
Is there any financial help for first-time buyers?
Luckily for those looking to make their first step onto the property ladder and buying their first house, the amount of support that is out there has never been as high. The London Help to Buy Scheme is provided by the government, in which you can gain a loan of up to 40% (Greater London) of the cost of a new build home. With the London Help to Buy scheme, you will need to contribute at least 5% of the property price at the deposit, which means you will need to get a mortgage of up to 55% to cover the rest.
The Help to Buy scheme is not the only initiative which is out there aiding first time buyers to make their the all-important first move into the property market. The Rent-to-Buy Scheme was introduced to help those who are struggling to save enough for a deposit to get onto the property ladder. The scheme allows a first-time buyer to rent a home at 20% below the normal market rate for up to five years. During this time frame, you will have the option to buy the whole property or part. While this is an incredibly attractive scheme, you have to meet several criteria points.
Is buying a home in London realistic for first-time buyers?
If you are looking to buy in London, you probably already know the financial commitments you are going to have to make. Although there is has been a slight fall in the average house price within London due to the uncertainty Brexit is having on the housing market, the average price of a property is still considerably high. According to Zoopla the average first-time buyer property in Greater London, which is usually a one- or two-bedroom house, costs £509,047 with the average deposit being £126,600.
Are there affordable areas of London to buy property?
When you are looking to buy within London, transport links are a massive factor to consider. The typical myth about London property is, the further from the centre you go the cheaper it gets. Through using Sold.co.uk’s interactive London Underground property map, it is clear to see that this myth is misguided. Elliot Castle the CEO of Sold notes that “it is interesting to see that certain Zone 1 and 2 tube stations are relatively affordable such as Kennington, Vauxhall, and Borough, whilst places such as Richmond are on the higher end”.
Property prices in East London
So, in comparison to the rest of London, East London is generally one of the more affordable places in London. With relatively moderate house prices in comparison to the rest of London, with several up and coming areas. East London is starting to become an extremely attractive area to buy.
- Stratford: £377,196
- Bethnal Green: £477,487
- Aldgate East: £57266
Property prices in West London
In comparison to East London, West London is slightly more expensive. With strong transport links into central London and Heathrow Airport, on average house prices here are more expensive. Surrounded by several affluent areas such as Chelsea and Fulham, Chiswick and Shepherd’s Bush, house prices have been pushed up. However, prices around Ealing and Acton are more in the price range of the first-time buyers:
- Ealing Common: £508,163
- North Acton: £598,683
- East Acton: £432,392
North London Property Prices
Made up of a number of suburbs North London has strong transport links into Central London. With some affluent areas, prices are reasonably high and on the rise. Known as the intellectual part of town, North London is an extremely family friendly part of the city.
- Wood Green: £490,321
- Edgeware: £496,926
- Woodside Park: £621,255
South London Property Prices
Regarded as ‘up and coming’, South of the river is on the rise. With areas such as Clapham and Brixton attracting large number of young professionals, South London has a happening. With strong transport links and a lot of green space, prices in these areas are on the rise with a growing competition for property.
- Balham: £499,99
- Clapham Common: £423,977
- Brixton: £529,927
An innovative solution?
Growing in popularity, an innovative and clever way to buy a first home above your usual expectations is through a Property Raffle. Similar to your traditional raffle at a village fete where you buy a ticket to win someone’s homemade gin, the same principle applies instead you can win a house. So how does it work?
In similarity with a normal raffle you must buy a ticket in order to be entered in, and the more tickets you buy the greater the opportunity you have of winning. Once all the tickets are sold, the seller will draw a number as the winner, and the person who has the winning ticket wins the house for significantly under market value and without paying an agent fee and the seller has successfully sold their house.
There are several questions to why people sell their house in this way. The houses that are sold using this method are not your typical family or semi-detached home, they are usually luxury country estates or townhouses that have typically struggled to sell on the market and the seller is looking for a quick deal. Due to most people limited by budget in affording these, this is almost a guaranteed sale if the process is successful.
While this sounds like an incredibly attractive prospect, it is important to understand that property raffles are still relatively new and have only become popular in recent years. With some risks and legal questions which need to be outlined for the future, the actual return from an opportunity like this is not fully known. But safe to say it is an attractive prospect if they become more mainstream.