It’s fair to say that, at times over the past 10-15 years, first-time buyers in London probably felt there was more chance of winning the lottery than being able to buy a property in the capital.
London’s accelerated price growth, though, has slowed over the past two-to-three years, opening the door to first-time buyers keen to get that first foot on the property ladder.
So, what can you do to get on the London ladder? Here’s a run-down of some of the best options available to first-timers in the capital…
1. Stop renting
Okay, so it’s easier said than done because we all need somewhere to live.
But if you can remove rent from your monthly outgoings, saving a good enough deposit for a London property will be far easier.
According to Homelet, the average rent in London at the end of 2019 was £1,665 per month – a huge amount of money that could be pushed into your savings.
Moving back in with parents is often the best option, even if they do charge a small amount for housekeeping.
Of course, if your parents live a fair way from the city, this might not be an option – there’s little to be gained from replacing a hefty rent payment with increased travel costs.
2. Lower your rental costs
Another option could be house sharing, where rent is usually much cheaper on a room by room basis.
Of course, you’ll lose some space and privacy sharing with others, but house sharing can help build new friendships.
If you absolutely want to remain in your current rental property and have a spare room, you could ask your landlord if they would be willing to let you sub-let it.
This would dramatically reduce your rental costs.
You could also consider relocating to a cheaper area of London to save money on rent.
You would need to be mindful of increased travel costs, but sometimes moving a couple of Underground stops further out can reduce your rent while also not increasing your commute costs too much.
3. Start saving on outgoings
How much do you pay for a takeaway coffee each morning before you get on the Tube?
£2.30? £2.80? £3.00?
If you add the highest of those numbers up based on five days per week commuting, over a year that’s almost £800 just on coffee.
Spending is one area where you are in total control and cutting out little things like coffee or a sandwich from the shop at lunchtime can save you big amounts of money.
If you run a car, too, consider if you really need it.
London’s public transport network means you can get pretty much anywhere in the city fairly easily, while trains out of the city head to all corners of the UK.
Once you tot up how much you spend on fuel, insurance, road tax and maintenance or servicing, that’s a pretty large sum that can go straight into your savings for your first property.
4. London shared ownership
Property prices in London, at the time of writing, stand at £629,053 according to Rightmove’s latest House Price Index.
That’s a large amount of money in anyone’s book – particularly first-time buyers who are taking steps to help boost their deposits.
With that six-figure sum in mind, you could consider a London shared ownership scheme.
Homes for Londoners was introduced by the city’s mayor to help medium and low-income Londoners have a chance at buying their own home.
The scheme allows you to buy part of the property for a much lower price, while paying rent on the remaining share that you don’t own.
Because your deposit only needs to cover the share you’re buying, it can make home ownership a real possibility for many.
5. Buy with a friend
This is becoming more common with Londoners desperate to get on the property ladder in the city.
Young single professionals without partners to buy with are increasingly purchasing property with close friends and sharing the property and the mortgage payments.
As with partners who break up, though, friendships can sometimes go awry and this can cause problems when it comes to property.
So, if you are considering this route, do plenty of research and make sure both you and your friend protect your interests in the event of a fall-out.