Buying a home in London can seem like an impossible dream but a new report shows property prices in three quarters of the capital’s boroughs have fallen over the past year.
The latest Rightmove House Price Index reveals asking prices in 24 London boroughs have fallen by up to 6.7% year-on-year – while only eight areas have seen asking prices rise or remain static.
Which? reveals where London house prices are cooling and the help available if you want to buy a home in the capital.
- Want to buy a home in London? Call Which? Mortgage Advisers on 0800 197 8461 for advice on the lenders to go for.
What’s happening to London house prices?
The average price of a property coming to the market in Greater London has jumped 3.4% in February, as owners of higher-priced property gear up for the spring selling season.
However, despite this large monthly rise, the less volatile annual rate of change shows a year-on-year fall in asking prices of 2.1%.
It’s important to remember, though, that the Rightmove data on asking prices tells just one part of the story when it comes to house prices in London and the rest of the UK.
Asking prices represent what sellers want their property to sell for, but won’t necessarily be what buyers are willing to pay – and you may be able to negotiate an even cheaper deal.
To see what properties are selling for, you should also keep an eye on the UK House Price Index which collates house sales data from HM Land Registry, Registers of Scotland and Land and Property Services Northern Ireland and is calculated by the Office for National Statistics.
Where London house prices are falling
The table below reveals the 24 boroughs where asking prices have fallen – and the eight where they have stayed the same or gone up.
The information is ordered by annual percentage change, but you can order the table by monthly change or average property price by clicking on the column header.
Asking prices in the London borough of Lambeth have seen the sharpest fall at 6.7% in a year but the average price of a property is still an eye-watering £601,368.
The cheapest London borough is Barking and Dagenham, according to the Rightmove data, where a typical property is priced at £307,290 and asking prices have dipped 2.9% in the last year.
How London house prices compare
London house prices are notorious for being much higher than the national average.
Typically, a home coming onto the market in the capital cost £614,182 in February compared with £148,576 in Scotland.
You can compare prices across the regions of the UK in our map below.
How to buy a home in London
But there are a number of schemes which could help you make it happen.
The London Help to Buy scheme, for example, offers first-time buyers and home-movers buying a new-build home in the capital an equity loan worth up to 40% of the property’s value (compared with 20% for those buying outside of London).
You’ll need to put down a deposit worth at least 5% and take out a Help to Buy mortgage covering the remaining 55% of the property price. So if you wanted to buy a house for £400,000, you’d need:
- £20,000 (5%) deposit
- £160,000 (40%) Help to Buy equity loan
- £220,000 (55%) mortgage.
Alternatively, you could use the shared ownership scheme, which allows you to buy a share of between 25% and 75% in a property and pay rent on the remaining share.
You may also be able to make use of the growing range of 100% guarantor mortgages. With this type of mortgage, you don’t need to have a deposit, just a guarantor that promises to meet repayments if you can’t.
- Find out more: buying a house or flat in London
Get help buying a home in London
Buying a home in London can seem like a daunting task, especially if you’re a first-time buyer. But it’s not impossible.
To find out your chances of being approved for a mortgage, talk to Which? Mortgage Advisers for free.
An adviser can quickly tell you if you have a large enough deposit and what you could borrow to fund a property purchase in the capital. Call Which? Mortgage Advisers on 0800 197 8461 or fill in the form below for a free callback.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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