Homebuyers working in london may be able to snag a bargain, with prices within the capital now lower than this past year, based on new data. But where are the cheapest areas to purchase?
Figures from the latest report, by consumer intelligence firm Twenty Ci, says West Central London saw the biggest decrease, with prices falling 15% every year. The average in the region, which includes Camden, Islington and also the City of Westminster, has become lb907,801.
The second-highest drop was at East Central London, which includes Hackney and Tower Hamlets, and prices fell 13% compared with January 2022 to lb806,579. In North-West London, meanwhile, the average asking price fell to lb947,691, a 10% decrease every year.
Despite the dip in prices, however, many of these regions of London remain unaffordable for buyers seeking on the property ladder.
Here we take a look at housing affordability working in london and where you'll find the least expensive properties.
London housing affordability reaches critical levels
With house prices working in london still sky-high, buyers often find it difficult to find homes they can afford – especially if they’re on a low income and renting.
The Twenty-Ci data found that London workers earning towards the bottom 25% of salaries wouldn’t have the ability to buy properties in the lowest 25% price range.
In to achieve this, they'd need to spend 70% to 131% of their annual take-home pay on the mortgage, even accounting for a deposit.
Another characteristic of the lack of affordable housing may be the proportion of properties listed on the market in contrast to those available for rent.
In your fourth quarter of 2022, almost 60% of London listings were to rent properties, compared with 40% in most other major UK cities.
The chart below shows the proportion of sales listings compared with rental listings in London.
Getting a home loan in London
With property prices in the capital up to they're, obtaining a mortgage for any home working in london can feel daunting, particularly if you're a first-time buyer.
Before you start your search for houses, you need to see how much you really can afford to borrow, to get a concept of areas you could realistically consider buying in and what types of property.
Mortgage lenders are allowed to offer a loan as high as four-and-a-half times the entire annual salary of you and also anyone else you're buying with.
They'll also think about a selection of additional factors including your credit rating, debts you owe, your average spending and your personal circumstances more generally.
Check out our guide for advice on purchasing a house or flat in London
Cheapest properties in London
In today’s market, buying a home in London can seem like a farfetched dream but there are several areas offering cheaper properties.
We’ve rounded up the lowest-priced homes whatsoever expensive areas to purchase a house within the capital.
Our table also enables you to compare homes available with the shared ownership scheme.
| Shared ownership | Not shared ownership | |
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Barking and Dagenham |
   
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Bexley |
   
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Newham |
  
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Source: Rightmove, correct by 31st Janurary 2022
Schemes that will help you buy in London
If you’re struggling to buy, we've rounded up three government schemes that may help you secure a house within the capital.
Help to purchase London
Governments in England, Wales and Scotland all offer equity loans to help buyers purchase a property. London has its own version of the scheme which offers more money compared to elsewhere in the united kingdom. The scheme is open to first-time buyers and residential movers looking to buy a new-build home worth lb600,000 or less.
Under London Assistance to Buy, if you purchase a new-build home in Manchester, you are able to apply for an equity loan as high as 40%. Which means that you can put down a first deposit of 5%, borrow as much as 40% from the property value in the government and take out a home loan on the remaining 55%.
The loan is interest-free for the first 5 years, after which you'll have to start paying monthly charges. You'll need to repay the loan entirely after Twenty five years or whenever your mortgage ends – whichever comes first.
Shared ownership
If you cannot manage to purchase a home outright, shared ownership can help you secure a property.
The scheme involves buying a share of the property – usually between 25% and 75% – and paying rent around the remaining portion.
Some shared ownership schemes allow you to increase your share in your house later on through a process called 'staircasing', enabling you to build towards full ownership.
Rent to Buy
Rent to Buy was brought to help prospective buyers struggling to save a good enough deposit to obtain around the property ladder.
The scheme permits you rent a house at 20% underneath the normal market value for up to 5 years. During this period, you'll get the option to buy the entire property or part of the property with the shared ownership scheme.
The way to obtain Rent to Buy properties is very limited and you may have to pass further eligibility criteria with respect to the housing association the property is offered under.
Get help from the experts
Whether you’re looking to get onto the property ladder or hoping to start the next phase, buying a property could be daunting and complex.
Speaking for an impartial mortgage broker can help you get the best deals for your financial circumstances and help to make the procedure run as smoothly as possible.
