First time buyers in London - what are your options?
I’ve had lots of tweets already this week about many people in London who don’t feel they will ever be able to buy a home.
Of course a major issue is that for many years now property prices – unlike rents – in London are not related to wages, so prices are going up when wages in London are at best stagnant and at worst actually falling in real terms. Well, for the ‘average’ amongst us as opposed to the senior management and high flyers who seem to be doing very nicely in comparison.
Problems for first time buyers are exacerbated by a blatant lack of planning and care on behalf of successive governments, local authorities and planning departments, to do any proper work to match the number of homes to the population – at a price and tenure they can afford and want.
This has been made difficult by the fact that more people are trying to afford a property on their own, which automatically halves affordability. That’s from people taking longer to settle down, divorce and the fact that people are living longer.
However, there are options, so it isn’t quite as disastrous as it feels, these include:-
Help to Buy for New Build
Help to Buy for existing homes
Shared Ownership
Shared Equity
Through these schemes you can buy with a 5% deposit. You can even part buy and part rent with a 5% deposit, meaning you can afford a property in London by saving around £10,000. I know its hard for one person, but possible for two people to purchase over time.
So not all is lost, and many people have moved a bit further away to places like Barking and Dagenham where properties are still relatively good value while still commutable. And if you can cope with a 45-60 minute commute places like Peterborough allow you to buy land and build or buy a nice property in the City Centre, walkable to the station for just £100,000. Yes the commute is a little bit more expensive, but trains come straight into Kings Cross, run regularly and for those desperate to own, it’s an option.
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