The First-time Buyer’s Guide to London

Apr 27, 2023
The First-time Buyer’s Guide to London
As the UK’s capital, financial centre and one of the world’s great cities, London remains an incredibly popular place to live. If you’re interested in buying your first home here, there are a few special considerations worth bearing in mind.

To help make the process easier when you’re ready to make your move, here is some advice for first-time buyers looking to buy in London:



Getting a mortgage in London

The first step to buying a home in London – for most first-time buyers – is getting a mortgage; a loan that you can use to buy a property, which you repay over an agreed timeframe.

There are many types of mortgages, to suit people’s circumstances – first-time buyers, moving homes, remortgaging and more. The two main types for first-time buyers are ‘fixed-rate’ and ‘variable’ mortgages, which affect how your repayments work. You can read more about the types of mortgages available here.

Before you decide where to live in London, it’s essential to work out how much you can afford to borrow (and the deposit you may need to save) to understand the properties and postcodes you should look at.

Typically, lenders will let you borrow up to 4.5 times the total annual income of you and anyone you’re buying the property with. As well as an income assessment, they will consider any debts you have, spending habits and personal circumstances.

Before applying, make sure your credit rating is in good shape by checking out your credit reports (Experian, Equifax and TransUnion are a good place to start) and correcting any mistakes immediately. You can use the information in your report to improve your credit rating. While you can apply directly with your chosen lender, it might be worth considering a mortgage advisor or broker to help you choose the right mortgage. They will have in-depth knowledge of the market and could make the process easier for you. Some even take their fee from the lender rather than from you, like the UK’s leading fee free mortgage broker, L&C.

How much deposit do I need to buy a home in London?

When it comes to your deposit, bigger is generally better. While there are schemes to help you access a mortgage with a deposit of 5%, a larger amount will unlock more attractive mortgage rates with most lenders. A deposit of 10-15% of the purchase price is not uncommon.

The average London house price (as of January 2023) is £534,000, so a deposit between £53,400 and £81,000 would be a good place to start. However, according to Halifax, in 2022 the average deposit for first-time buyers in London was £125,378, at an average of 24% of the purchase price.

As well as your deposit, you should save enough money to pay the upfront costs that come with buying a home. These can often include having surveys carried out, your solicitor/conveyancer’s fees, and even fees from your lender to cover things like valuation and transfer of funds. You can learn more about these costs here.


Can Barratt London help me make my move?

However much you’ve saved for your deposit, you may be interested in some of the schemes we provide – each designed to make moving into a new London home easier.

With Deposit Unlock, you could buy selected brand-new homes worth up to £750,000 with just a 5% deposit which could give you access to competitive mortgage rates.

If you have a 10% deposit saved, we could boost it by a further 5% with our Deposit Boost scheme, giving you a 15% deposit in total.

If you’re a key worker, our Key Worker Contribution Scheme could contribute £1,000 towards your deposit for every £20,000 spent on the purchase price.

Stamp Duty for first-time buyers in London

Stamp Duty is the tax charged by the Government when you buy a home or piece of land in England – whether you’re a first-time buyer or have previously owned a property.

In September 2022, the Government introduced temporary increases (lasting until 31st March 2025) to the amount first-time buyers can pay for a residential property before Stamp Duty Land Tax applies to the sale.

  • Up to £425,000, there is no Stamp Duty to pay.
  • Between £425,000 and £625,000, Stamp Duty is 5% of the amount over £425,000. E.g. for a purchase price of £500,000, you would pay 5% of the £75,000 above £425,000 (which is £3,750).
  • Over £625,000, no first-time buyer Stamp Duty relief applies.

It’s worth noting that Stamp Duty needs paying within 14 days of completion, so you’ll need to factor this into your upfront costs – though your conveyancer will usually handle the paperwork and money transfer.

Already found a property you’re interested in? Try our Stamp Duty calculator to see how much you’ll need to pay.


Where to live in London

From the bright lights of Soho to the open spaces of the suburbs, there are a huge number of neighbourhoods, communities and locations to choose from when buying in and around the capital. To help you get started, we’ve explored some areas in this guide for first-time buyers in London.

Where’s right for you will depend on many factors, from practical ones like budget and distance to work, to emotional ones like your lifestyle, future plans and areas you know and love. As well as the purchase price, it’s also worth considering expenses such as council tax and the cost of commuting.

Before making any decisions, do plenty of research on potential areas – ideally visiting multiple times to really get a feel for the place. Looking into major re-development plans or transport projects can also be a worthwhile way of identifying locations which currently represent good value.

The table below shows the average price of a London home by borough, as of January 2023:


 Average House Price

 Barking & Dagenham  £373,783
 Barnet   £705,192
 Bexley   £478,742
 Brent   £631,386
 Bromley   £627,261
 Camden   £1,094,027
 Croydon   £484,088
 Ealing   £606,416
 Enfield   £512,854
 Greenwich   £482,047
 Hackney   £690,821
 Hammersmith & Fulham  £974,050
 Haringey  £668,049
 Harrow   £613,726
 Havering   £475,446
 Hillingdon   £549,758
 Hounslow   £605,920
 Islington  £774,235
 Kensington & Chelsea   £1,620,304
 Kingston upon Thames  £694,940
 Lambeth  £655,629
 Lewisham  £511,777
 Merton   £712,740
 Newham   £452,940
 Redbridge   £501,194
 Richmond upon Thames  £934,094
 Southwark   £659,224
 Sutton   £528,643
 Tower Hamlets  £596,540
 Waltham Forest  £554,168
 Wandsworth   £817,204
 Westminster  £1,426,917


Are you ready to start looking?

Kick things off the right way with a look at our latest Barratt London developments. You could find yourself in your first home before you know it.

Start your search