Perhaps more than any other location in the UK, London’s property market demands that buyers keep a sense of balance and perspective. Unless you have unlimited funds – and few of us do! – you’ll likely find that you may have to make concessions on factors such as location or the property’s features (or both) in order to land a flat that’s realistically within your budget. Here are a few hints and tips that will help guide you to a property that suits you at a price you can afford.
If you are buying a flat in London, it is most likely to be a leasehold, so you will need to factor in costs such as an annual service charge to cover maintenance of the shared areas (eg. hallway, grounds, roof), plus ground rent and a contribution towards the buildings insurance. This can start at £100 per month in addition to your mortgage and other costs. As a rule of thumb, flats are leasehold or share of freehold, and houses are freehold.
Read more about the difference between leasehold and freehold.
London locations
There are two key things to finding the right location to buy a flat in London: do your research, and keep an open mind. Decide what amenities and features your ideal property will have, but remember that some factors, such as a garden or other outside space, will add to the property price – perhaps prohibitively so. Be realistic about which aspects of the property and location are essential, and which you would be willing to make concessions on to secure a flat at an affordable price.
The availability of public transport in a given location is a great example of this. To get about in and around London it’s pretty much essential that you have access to a convenient public transport link, preferably in the form of a Tube station within walking distance. However, the fact is that most other potential homebuyers in the city are looking for that same convenience, which in real terms means you’ll pay a premium for flats close to a Tube station – in 2013 the Nationwide estimated that buyers paid on average an extra £26,000 for properties within 500 metres of an Underground station. More recent research suggests that prices of properties near to stations open 24 hours for the forthcoming Night Tube service could rise by up to 10 per cent more than other areas nearby.
What type of London flat?
This is another factor where it pays to keep an open mind. London has a seemingly endless variety of properties on the market at any one time, from converted townhouses to modern property developments and everything in between. Each type of property has its own advantages and disadvantages, and it’s important not to take anything for granted. Pay close attention to the property specifications, to what you see when you view the property, and to the content of the surveyor’s report.
If you are on a budget, consider thinking outside the box and investing in a flat or location some other homebuyers might consider less desirable. Many buyers might prefer to avoid property on a main road due to the noise, but is this something you could live with? What about taking a flat above a shop or fast-food outlet? While it’s always important to remember that you’ll want to sell the property yourself some day, keeping a flexible attitude to these kind of factors is often a good way to snag an otherwise perfectly acceptable property at a decent price.
Remember to negotiate
Flat prices in London are high and so is demand … and don’t sellers know it! Remember that the vendor’s asking price may bear little relation to the actual value of the property. Even if it’s your dream home, there can be value in researching selling prices in the location, coming in with a lower price, and haggling if necessary. Buying a London property is an expensive business, and if you can free up even a couple of thousand pounds by undercutting the asking price then that’s extra money you can put towards other costs such as mortgage fees, conveyancing costs, a survey or the furnishings.
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Updated February 2020