London is one of the most desirable cities in the world to visit or buy a home, so it’s unsurprising that it is also one of the most expensive. Here we’ll talk you through the best value-for-money boroughs in the capital, the cost of renting in the city, as well as where is best to live if you are a young professional.
The Current State of the UK and London Property Markets
According to the Office for National Statistics, as of November 2015:
- UK house prices rose 7.7% in the past year
- House price annual inflation can be broken down as:
- 3% England
- 3% Wales
- 4% Scotland
- 6% Northern Ireland
For the same time period London’s annual inflation was 9.8%
(image from ONS)
Where in London Can You Get the Most Space for Your Money?
Wonder where the most affordable and most expensive areas of London are? Find Properly has done the hard work for you.
SW3 and W1 are the most expensive postcodes in London, costing £2,067 and £1,974 per sq. ft. respectively. The cheapest areas where you can get the most for you money are N9 and SE4 which cost £270 and £274 per sq. ft.
Where Do All the Young Professionals Live?
According to census data, the London Borough of Islington is the most populated by young and single working professionals with 46% of its local population belonging to this group. Located just north of the Thames, Islington has excellent transport links throughout the capital. And with a high-volume of flats and apartments it is an ideal place to live alone or with a partner.
This borough is also highly popular with students, with more than 6,000 people here registered as living in a communal property, thanks to the nearby London Metropolitan University and City University London.
What About Renting in London? How Much Will That Cost?
Renting a home in London is considerably more expensive than anywhere else in the UK. The average price for renting a house or flat in London is now more than £1,500 according to a study by HomeLet, whereas the average for the rest of the UK is just £750 per month. Therefore, buying a property with a mortgage could be more affordable than renting in many parts of the city.
Would Buying with Cash Be Beneficial?
If you can afford to buy a new London home with cash, you may be able to find yourself a bargain. 58% of homes costing over £1million are now bought without a mortgage or any other kind of loan, whereas 25% of people require a mortgage for financing half the value of the property.
These figures are even higher when analysing purchases of luxury properties over the £5million mark. 76% of buyers in this bracket don’t need a mortgage.
So, why is this? Well, cash buyers are seen as highly desirable as they have no strings attached and can move quickly. And in a fast pace property market like London’s, you snooze and you lose.
The Future of London’s Property Market
London’s property market is extremely strong. It was barely affected by the 2008 boom and bust in the UK property market and prices have continued to steadily rise ever since. In fact, many UK property experts predict that it will only improve. Forecasts claim properties could rise by up to 25% by 2020. This is mostly due to a high-demand for affordable property in the city, yet few new-build opportunities.
Whether this happens, we can only wait and see, however if you’re interested in historic property price data, London Property Watch has depicted the last 10 years’ worth in an easy to read graph…
So, in short, if you want to make the most of your money when buying property in London, buy with cash if possible and head to the outer limits of the city if you’re looking for maximum space for your budget. And the longer you can hold onto your property, the more profit you are likely to make on your investment over time.