5 Ways To Get On The London Housing Ladder

5 Ways To Get On The London Housing Ladder

 

With property prices rising, it is increasingly becoming difficult to start on the property ladder in London. When mortgage companies unwilling to lend to people without a sizeable deposit are thrown in the mix, medium-wage earners are getting shut out of the property market.

To illustrate the hurdle new entrants face, Halifax recently estimated the average deposit required of first-time property buyers in London at £100,000.

If you are in this category, you do not have to give up as some moves and steps can help you become a London property owner. This article contains five tips that will help you do just that.

Avoid renting or keep renting costs down

Unless absolutely necessary, plan your affairs so you do not have to pay London rent. As a city known for high rents, one of your highest monthly expenditures is rent. If possible, move in with a family member to save as much as possible from your income. You will have to split bills in the worst-case scenario, but it is far better than paying London rent.

Sometimes, you can’t avoid renting, especially if you already have a family. However, keeping your rental costs low should be your priority. There are several tricks that you can play here. You can relocate outside London and commute into town if that is where you work. However, you have to weigh the cost of transport against your potential saving.

You can sublet a room if you are single, so you do not have to pay for a whole apartment. Or, if you already rent an apartment, sub-rent out a room and earn some of your costs back. This will, however, depend on your tenancy agreement so be sure to confirm before going ahead.

You could consider downsizing your living space by going for a smaller apartment. Or move into a house share.

The goal is to spend as little as possible on rent so that you can save up for the deposit. The next tip is about how to save more of your income.

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Save more

The old-fashioned advice to save is still valid. While you do not need to turn to an ascetic lifestyle, you can cut down on your expenses so you can put more of your income aside. If there are luxuries you can do without, try to eliminate them. However, you don’t need to stop at luxuries alone as you can examine each of your expenses and determine if you can’t do with them or step down. For example, do you need a car to get around in London? Can you cut down on your utility bills?

Try creating a monthly budget and stick to it. There are many budgeting apps you can download and use.

Borrow from parents to buy

Suppose your parents are in a position to lend you money. In that case, it is better to take the opportunity as it often comes without interest, and the payment terms can be more flexible. This is not an uncommon route to homeownership in London as it is how two-thirds of first-time London property buyers get it done. Even if your parents cannot afford to lend you the deposit you need, they might serve as guarantors for your loan application, which is known to increase the chance of getting the loan.

Buy part of a property or with a partner

You do not need to wait until you can afford a home deposit before making your first house purchase in London. Part-ownership schemes like Homes For Londoners will let you pick up a share of a home, allowing you to purchase as little as 25% of a house. Usually, you can increase your share in such a home with time or sell when the price appreciates.

If you have a significant other, it is wise tobuy London property together for the first time. It would be easier to save up for the deposit together on two different incomes. In the absence of a partner, you can buy with friends.

Go for new build property

The ideal choice for many first-time buyers in London is new build property. The developers usually offer buyers equity loans as they do not need to wait to dispose of an old house, potentially time-wasting.

Where are the best locations for first-time buyers in London?

There are several areas where house prices are below the £400,000 average in London. You can investigate locations like Croydon, Harold Wood, Manor Park, Stratford, Bromley, etc.

London property prices may be rising, but there are plenty of things you can do to become a first-time homeowner in the capital city.

Conclusion 

It's no secret that London has some of the highest prices for homes out of the whole UK. However, London can be a fantastic location to live for people who have excess capital or even provide an extremely profitable investment opportunity. 

If you are interested in viewing the newest and most up to date properties for sale in London, feel free to browse through our website. We have access to new homes for sale almost instantly, and we can improve the chances of you being able to get your hands on your dream home.

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