Central London is still as sought-after as ever and high house prices make finding a property in London a challenge.
Whether you are buying a new home or looking to invest in London property, you will probably have to compromise on factors such as location or property type in order to find a flat that is within your budget.
Here are a few hints and tips to help you find a property that meets your needs at a price you can afford.
Leasehold Or Freehold
If you are buying a flat in London it is likely to be leasehold. A leasehold gives the purchaser the right to occupy the property for the period specified in the lease. Leases are usually long-term – often 90 or 120 years, but can be as short as 40 or as high as 999.
Some flats are a share of freehold, this means that the leaseholders each own a share of the company who owns the freehold. This gives the leaseholders more control over their home, as well as giving them the power to extend their lease for up to 999 years.
Check The Length Of The Lease
The costs of extending a lease are high so when buying a leasehold property, check how many years are left on the lease and how many will likely remain by the time you may want to sell. A short amount of time left on the lease could cause issues with the future sale of the property. The value of properties with short leases will rapidly reduce as the lease period decreases. A residential lease with less than 80 years left to run constitutes a short lease.
Check The Annual Charges And Building Costs
As you will most likely be buying a leasehold flat, you will need to factor in costs such as the annual service charge and ground rent. The service charge covers all the activities that are required in order to maintain the building including, buildings insurance, maintenance and repairs, provision of leisure facilities, concierge services or additional security. Ground rent is typically a token fee paid to the freeholder in exchange for renting the land the property sits on.
Find out what the annual charges or maintenance/building costs are. Apartments with more communal areas or leisure facilities such as gyms will have higher service charges. High annual service charges can tip the balance in favour of an apartment in a non-communal building which doesn't come with these extra costs.
London Locations (Where To Buy In London)
What constitutes a 'good location' will vary from person to person, so it's as well to do your research and keep an open mind.
Decide what features and amenities your ideal flat and location would have and identify what aspects you would be willing to compromise on.
Flats in sought-after areas with features such as outside space will fetch premium prices which may be out of your budget. However, we would advise you to buy in the best location you can afford, even if this means comprising on the size of the flat. This protects you against the risk of a weakening property market because prime properties tend to hold their value better. For the best locations in central London, you can’t beat Knightsbridge, Mayfair and Kensington.
Proximity To Public Transport
To get around London it is essential to have easy access to public transport, preferably a tube station and ideally within walking distance. Access to rail services and regular bus services are also a significant advantage.
Most London homebuyers looking for easy access to public transport so expect to pay a premium for flats within walking distance of a tube station.
What Type of London Flat?
London has an endless variety of new and old flats and apartments on offer, including modern property developments, converted houses, period apartment buildings and flats above shops. Each property type has its advantages and disadvantages, keeping a flexible attitude may mean that you can get a hold of a great property at a good price.
Look Beyond Flashy Design and Furnishings
Appearances can be deceiving. When viewing an apartment, try and be as (quietly) critical as possible, and look at the property with an objective eye. The fixtures and furnishings might look good, but have they been installed well? If you bear this in mind, you might be able to pick up on things you otherwise wouldn't have spotted.
Walk Around the Neighbourhood
If you are new to the area, walk to get a feel for the neighbourhood and look out for anything potentially problematic. It’s worth doing this at different times of the day as a quiet residential street in the daytime could be busy and nosy with evening revellers. Walking around the area at night will also give you a feel for how safe it is.
Find out what shops, restaurants and other facilities there are nearby. Check out how long it takes to get to theatres in the West End or top shopping spots in London.
Don’t Be Afraid To Negotiate
Demand is high for flats and apartments in London, which pushes up prices but don’t let that put you off trying to negotiate on price. Research selling prices in the location and consider making your offers a lower price and negotiating from there.
Consider Hiring a Search Agent.
Take on a reputable local agent. This can make all the difference to the process of searching for, finding and buying an apartment, or any property for that matter. A local agent will know the market you're interested in well, and they will be able to offer advice and support when you need it most, which, with the general stresses involved in buying property in London, can prove invaluable.
How Much Does A Flat Cost To Buy In Central London?
Of course, this can depend on several variables, such as the size of the property, the location, whether it has outdoor space etc. According to Rightmove, last year, the average sale price of a flat in central London was £1,249,116.
It's important to consider the extra costs involved in buying property when deciding your budget, such as how much stamp duty you will be liable to pay.
How Much Deposit Do I Need To Buy A Flat In Central London?
Generally, mortgage lenders expect buyers to have a 10% deposit of the sale price, so using the above-average price of £1,249,116, you would be expected to pay a £124,911.60 deposit. It’s not uncommon for lenders to ask for up to a 20% deposit, so it is important to know what you can afford and what support is in place before you set your heart on a property.
Since the 2021 spring budget, the Government has made it easier for first-time buyers to get on the property ladder by introducing the 95% mortgage guarantee scheme, which has encouraged lenders to offer mortgages with only a 5% deposit.
There are other schemes in place to help buyers within London afford a property, such as the Help to Buy Equity Loan, the Shared Ownership Scheme, the London Help to Buy Scheme and the London Living Rent Scheme.
Plaza Estates are one of the capital's leading independent specialist agencies. If you would like expert advice on buying a property in and around Mayfair, Knightsbridge and Kensington get in touch with us today.