Best London areas for first time buyers

According to the latest government figures, London’s house prices have fallen drastically for the first-time in nearly a decade, with the current average being £15,415 lower than last year. This has affected the number of transactions being agreed by estate agents in Greater London, with sales being down by 6.9% in 2018 so far. 

With the average age of first-time buyers in London today being well into their 30s, it’s worth noting that 45% of houses sold in Greater London went to first-time buyers. It is also important to be aware of the popular areas that first-time buyers flock to, along with the cheapest places in London and the biggest price growth areas respectively. 

Extra Costs for First Time Buyers

House prices have fallen drastically, and the new change in stamp duty means properties under £300,000 are exempt from paying it. However, it’s important to be aware of extra costs that come with purchasing a house, to avoid any nasty surprises later down the line.

The biggest cost to factor in will be saving money for a deposit. First-time buyers generally will need to save for anywhere between a 5% or a 20% deposit.

Another cost to consider is estate agent fees, which usually range from 1% to 3.5% of the property price. Estate agents should be clear on any additional hidden costs and what is included in the fees.

Most first-time buyers undermine the importance of getting a property survey, but it’s vital in keeping costs down on the sides of both an estate agent and a first-time buyer. The survey will be able to highlight any defects or damages that could crop up later in the process, ultimately saving money in the long run. House removal comparison website Compare My Move can help with this by finding up to 4 verified surveyors to pick from.

Schemes for First Time Buyers

These following government schemes help to make the saving up process easier:

  • Help to Buy: Equity Loan
  • Shared Ownership
  • Help to Buy: ISA

Help to Buy: Equity Loan: will loan first-time buyers 20% of the price of the property meaning just a 5% house deposit. 

Shared Ownership: gives the buyer the opportunity to purchase a share of their house and pay the remaining in rent.

Help to Buy ISA: allows first-time buyers to receive a bonus of up to £3000 from the government.

Estate agents should ensure that first-time buyers are made aware of these schemes – which will serve to make the process of buying a first home easier for both sides.

Most Popular Areas for First Time Buyers

According to Which, Harold Wood in Romford is the most popular area for first-time buyers to purchase a house, with 74% of the area made up with first-time buyer owned properties. The house price has increased by 12% in two years with the average property price being £219,310, but it remains a solid favourite for first-time buyers to take their first step on to the property ladder due to its popularity and price. 

Coming in at the 5th most popular area is Upper Holloway & Archway in Islington. It sees 70% of its residents being first-time buyers, even though the average price is significantly higher than other areas in London, at £557,290. Upper Holloway & Archway is still ranked a desired area for first-time buyers, considering house prices have grown by 13% in the last two years.

You can find the figures for the 5 most popular areas of London for first-time buyers, in the following table:

Area of LondonPercent of First Time Buyers Buying a HouseAverage Property Price for First Time BuyerAverage Property PriceHouse Price Growth in Two Years
Harold Wood (Romford)74%£219,310£317,85012%
Northolt (Ealing)73%£240,630£348,74014%
Bromley72%£388,520£480,45014%
Belmont (Sutton)70%£323,190£468,39013%
Upper Holloway & Archway (Islington)70%£557,290£691,63013%

Data from Which.co.uk

Affordable Areas for First Time Buyers

The top 5 affordable areas in London for first-time buyers and the average price paid are as following:

  1. Becontree – £202,320
  2. Becontree Heath – £208,530
  3. Harold Wood – £219,310
  4. Northolt – £240,630
  5. Kingsbury – £300,640

As you can see, Becontree Heath’s average first-time buyer price is £208,530. This remains inexpensive considering the area has seen a 20% house price increase in the last two years, with 63% of the area made up of first-time buyers.

By September 2019 Becontree Heath can expect to see the completion of the £39m regeneration project, creating a mixture of 170 private and reasonably priced new homes, which will be advantageous for both sellers and first-time buyers.

Biggest House Price Growth Areas

For sellers and first-time buyers alike, it’s always beneficial to be aware of the areas that have experienced the vastest house price advance but also remain reasonably cheap favourites for first-time buyers.

The 5 highest price growth areas in the last two years:

  1. Rush Green & Mawneys – 25%
  2. Walthamstow – 21%
  3. Becontree Heath – 20%
  4. Dagenham & Becontree – 18%
  5. Kingsbury – 18%

Rush Green & Mawneys in Romford has faced a 25% price growth, however, 61% of first-time buyers own property there as it remains affordable at £311,440.

Walthamstow in the borough of Waltham Forest proves to be a popular area amongst first-time buyers, with 69% of the houses being bought by first-time buyers. Walthamstow has seen a 21% increase in house prices within two years, with the average price paid being £419,520.         

Dagenham & Becontree sees 58% of its home owners being first-time buyers paying an average of £202,320, even though the house prices have increased by 18% within two years.

Living in London Doable for First Time Buyers        

Although property prices have fallen drastically, there are additional costs to consider for first-time buyers. However, there’s popular areas that see affordable house prices even though they’ve grown within two years. For example, Rush Green & Mawneys saw a 25% growth in house prices but 61% of its residents are still first-time buyers at a reasonable price of £311,440.

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