A Comprehensive Guide to Buying a House in London 2025
If you knew, London is among the top 10 most expensive cities to live in, especially when it comes to buying properties. If you are one of those planning to buying a house in London, then it arguably will be the biggest decision of your life. In this guide, we shall take you through the stepwise approach for buying a house in London, whilst discussing useful tips and things you should be aware of.
House prices in the UK are currently on the rise, and the rate has surged beyond 4% which is quite an increment from the previous years’ 2.5%. Surprisingly, the best of all news for those planning to buy a property in London is, since November 2024, property prices in London have only taken a meagre increase. Yes, according to data from HM Land Registry, property prices in the England capital are 0.1% lower compared to the previous year. While house prices in regions like in the South-East experienced a surge with average house price standing at £378,000, the lowest average house price was found in the North-East at £169,000.
The average house price in London for January was priced at about £511,280, while in November, the average house price was £510,000. Though this is a month-on-month statistic, the number has only witnessed a moderate increase.
Now that we have some clarity with regards to house prices, its’ time to look into the meat of the matter; buying a property in London. Before we deep dive into the how’s of buying a house in London, let’s look at why this is a great time to those investing. So, if you are an investor, this could be a great time to invest your money on a property in London.
Why this is a Great Time to Invest on a Property in London?
Currently, the London property market is ripe for investors & buyers in so many ways –
1. Increased Rentals
Rental increases have outpaced property price growth in recent years and are towards a steady rise benefitting the landlords with higher incomes.
2. Flexibility & Diversity
Amongst most cities across the world, London is positioned quite distinctly as it is not only shelters diverse property types across different boroughs, but also because the properties are priced differently. This gives investors the flexibility to choose according to their budget.
3. An Economic Hub
London remains to be one of the top destinations for many investors considering the city’s established position as a leading financial center. London’s diverse workforce, skillsets, conducive legal system, makes it a one of the largest economic hubs across the globe.
4. Scarcity of Land
Land is at premium in London, and limited availability of land naturally drives the prices to go up.
5. Strong Future Prospects
The forecast for property value in London is on the higher side as property prices are expected to increase by 4% this year.
First Home Scheme for First Time Buyers
If you are a first-time buyer, you must know that there are schemes that can help you buy your first home in the big city. The first home scheme designed in 2021 provides privileges to a certain section of people to help them with their first buy. The scheme is across the whole England, including London.
If you are a first-time buyer, you will be able to buy your first home in London for a price 30-50% less than its original market price. For example, if the property you are planning to buy has a market value of £100,000 you can then buy the property with a discount of 30% which reduces the house price by £30,000. So, the total price you will end up paying will be £70,000.
Who are Eligible for the First Home Scheme?
- You are a local (must have worked, lived in the area, grew up in the area or have a family) and have a low household income.
- Keyworkers (as defined by your council) and includes doctors, nurses, social workers, frontline health workers, midwives, etc.
- A member of the armed forces or a divorced spouse, partner of the member of the armed forces.
- A widow or a widower of a deceased member of the armed forces.
If you are all set and looking forward to embarking on buying a house in London, the following guide will outline everything you need to know and help you mark your first footprint –
Buying a House in London
Buying a house in London is unlike buying in any city. It is the biggest city in Europe and is counted among the financial powerhouses of the world conferred with Alpha++ status. Unlike other cities, London is mesmerisingly diverse. It is so much quintessentially British, showcasing a rich cultural pedigree that dates back to olden times, yet exudes a modern, urban aura to suit the contemporary.
1. Start by Planning your Budget
Regardless of the location, this is the first and crucial step when it comes to buying a property. Especially for a city of the scale of London where the real estate market is always at peak, your preparation cannot go wrong.
- Set the budget based on your income.
- If you are planning to buy a house in north London, or to buy a house in central London, you must plan accordingly as they have two different price points.
- Research property prices thoroughly as mentioned above. To buy a house in north London requires a different budget and to buy a house in south London will cost you different for the same property dimension.
2. Get On a Mortage Agreement
If you are short on budget, then it’s better to pre-emptively look for a mortgage lender. The good news is that banks in the UK can offer you mortgages even when your total on-hand contribution towards buying a house in London is 5%.
This means if the property you are buying is worth £100,000 then your contribution towards the purchase as a deposit can be as low as £5,000, while the remaining £95,000 will be a mortgage. The issue however will be the high interest rate. Criteria such as your income, age (should be 18+), term of the loan, your financial history all will be considered.
3. Tax Liability
You will be liable to pay the Stamp Duty Land Tax (SDLT) when you are purchasing a home. Look here for detailed information on SDLT.
4. Hire a Conveyancer
This is rather an investment we recommend unless you are aware of the property laws and legalities that concerns property transactions in England. As specialists in this area, a conveyancer or a solicitor will transact on your behalf and will manage all the necessary tasks right from inspecting the legitimacy of the property, any previous history, till helping you secure the purchase.
For a standard property transaction, a conveyancer in London may typically charge between £900 to £1,700 plus VAT. The cost usually depends on the type and location of the property, complexity of the transaction, etc.
There are additional costs that incur with land registry fee, bank transfer fee, local search fee all adding up. So, make sure hiring a conveyancer is a part of your budget if you need one.
5. Start your Property Search
After being clear on your budget, it’s now time to start your search. Remember, London is a multi-ethnic city with diverse cultures and a heritage that is distinctly represented in almost every neighbourhood. While searching the location look for the things you desire the most and that suits your daily lifestyle and routine.
- If you are looking for a place which is to be at nearness to your work location and if you are required to commute to your work daily, then choosing the urban part of London would be perfect. Urban London has a well-connected transport system (Rapid Transit System) which is quite efficient and connects to all parts of the city. If your work life relieves you to work only for a few days at office in a week, then choosing a sub-urban location would be a good move.
- If your interest and priority is to enjoy the urban chaos with culture, then choosing urban London as your property location fits great. While North London is a bustling art & culture hub, South London has more of the green share with parks and other neighbourhoods and is less crammed with buildings. Central London is the heartbeat of the capital and is eclectic with mix of commerce, tradition, and culture.
- If cost is a deciding factor in your property search, then areas such as Barking & Dagenham, Thamesmead, Deptford, Croydon, Bexley can be considered.
6. Buying the Property & Ensuring Basic Facilities
Once you are done choosing the location of your property, it is now time to make the first move. Make an offer! If you are investing into an agent, then let them handle it as they are experts in the field and will know the art of negotiating.
If not, make sure you know what are stakes when purchasing. The purchased property should include basic features such as electrical works, plumbing, proper insulation, heating facilities, adequate window installations, kitchen & bath equipment such as worktops, storage units, shower, sink, bathtub, toilet should all be included.
7. Seal the Purchase
If you are satisfied with the property and have ensured what’s to be included and what’s not, you can now finalise the mortgage amount after thorough assessment of your budget.
Don’t Miss these Important Tips
- Hire an estate agent: Look for specialist agents such as Purplebricks, Connells Group, Hunters, Your Move, Reeds Rains, and there are many such.
- Go through Auctions: If you plan to buy through an auction, you can then subscribe to auction forums and magazines such as the EIG, Property Auctions News magazine, Estates Gazette Magazine, and London Auction House mailing lists, etc.
Some of the top auction houses in London are Savills, Network Auctions, Philip Arnold, to name a few. There are online platforms, networking events to which you can view and attend and make most of those platforms.
Tips for Successful Bidding at Auctions
- Research thoroughly and set realistic bidding budgets
- Make sure you attend auction previews to understand the condition of potential properties
- Consider proxy bidding as a strategic option
- Look Yourself (web/online): Go through websites specialising in property sales and if you like one better go and view the property yourself physically.
- Check if the property you are buying is registered under the Land Registry.
- Make sure all the documents pertaining to the property is secured.
- Make sure previous mortgages are paid off for the property you are buying.
- Make sure there are no previous arrears, legal issues, right-of-way agreements or any other encumbrances.
Conclusion
2025 can be a great time to buying a house in London, but it requires careful planning and analysis. It all starts from getting your mortgage amount right and finding the apt location that goes with your needs and likings. Your long-term dream requires many good moves, but one bad step can make things different. Contact us today for more details.
