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10 Things to consider when buying a home in London

Published: 14/10/2021

Buying a home in London can be a daunting prospect. The largest city in Britain offers a huge variety of neighbourhoods, schools, parks, social activities and so forth. The main factors to consider will depend upon what stage of life you are in, but below we have outlined 10 things that every potential home-buyer will have to consider when purchasing a house in the capital.

How much can you borrow?

As a general rule of thumb, banks will let you borrow up to 4.5 times your total annual income. So if you have an income of £30,000 and you're buying on your own, you're likely to be able to borrow up to £135,000. If you're buying with a partner with the same income, this will double your borrowing power to £270,000.  A mortgage lender will also consider a variety of other factors such as your credit rating, personal circumstances, any debts you owe and your average spending. While online mortgage borrowing calculators will give you a rough idea of budget based on your income, it's worth speaking to an impartial mortgage broker for an accurate, personalised view on how much you'll be able to borrow.

Average house prices in London

London is the most expensive place to buy a home in the UK by a considerable distance. The average house price in London in December 2020 was £496,066 - almost double the UK average of £251,500, according to data from the Land Registry. The capital is also the hardest place to get on to the property ladder. The average price paid by a first-time buyer in the city was £431,160 in December 2020, compared with £224,560 in England as a whole.  First-time buyers in London put down a hefty average deposit of £130,357 in 2020, according to Halifax. This was more than twice the UK average first-time buyer deposit of £57,278.

Cost of living in London

In addition to the costs of buying a house, you'll need to consider extra expenses such as council tax and commuting. Each borough sets its own council tax rates, meaning you'll need to pay significantly more in some areas than others. For example, council tax rates in Wandsworth are less than half those in Waltham Forest.

Drainage

In some instances, drainage systems are the last thing on people’s minds when they are buying a house. However, this should not be the case. Ineffective, broken or damaged drainage systems can lead to much bigger problems and as a result, very costly repairs. In order to avoid unnecessary stress and expense, it’s best practice to instruct CCTV drain surveys in London before agreeing on a purchase price for your property. This way, you’ll be aware of any present or potential issues, and even use the cost of repairs as a way of negotiating a sale price.

Needs

When it comes to buying a house, a lot of people are willing to make compromises on some things, but definitely not on others. For instance, a garden, a garage, a balcony, two toilets – this list is certainly not exhaustive. Purchasing a property is a huge investment so don’t make any rash decisions. Be sure that you’re happy with your non-negotiables

Security

If you’re already residing in London, you probably have a good idea of the safety and general reputation of the area in which you are looking to buy your first home. However, if you aren’t already acquainted with the surrounding areas or are perhaps moving to the area for the first time, it may be a good idea to look at the crime rate and maybe even look into installing appropriate security measures for peace of mind. Your home should be regarded as your safe place, so any security investment is a positive one for your mental, physical and emotional well-being.

Longevity

It’s always good to think about the future when you’re buying a house. At this moment in time, you may think of this property as your first home, but does it have potential to be your forever home? You might end up falling so in love with your house that you don’t want to move, so it’s good to think that the property has potential to be extended in the future should the occasion arise.

Transport options

Most of London, including the suburbs, is covered by the underground train system known as ‘The Tube.’ For your own ease of travel (and for future ‘saleability’ ratings), try not to buy a property located more than 10 minutes walk from a tube station. However, properties that don’t hit this mark are likely to be cheaper. Overground connections or a bus route can see you saving thousands on the price of a property.

Size

When looking for a house, one factor that you should account for is your future needs. While a 2-bedroom apartment is enough for your needs right now, it may not fit you moving forward into the future. If you plan to have kids, then there is that fact to consider. Additionally, there’s also the number of items that you have. You may want to get a bigger sized house if expanding your family is on the table.

Schools

Even if you’re not planning on starting a family soon, it’s always good to have a quick glance at the schools in the immediate area. As with anything in life, people change and plans change, so it’s good to know that you’re prepared with all the necessary information should you consider starting a family in the near future.