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Tips for First-Time Buyers in London

Tips for First-Time Buyers in London
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Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin22 Dec 2023

Tips for First-Time Buyers in London

Every first-time buyer London will know that property prices in the capital are higher than anywhere else and often reach around double that of other major cities. Today, the average cost is £718,000 and the median £525,000, with a growth of about 8% in the last year.

These figures indicate why help for first-time buyers is so important in London and why first-time buyer mortgage advice may be essential for prospective homeowners who cannot see a way to secure a home.

Today Revolution Finance Brokers explores some of the best first-time buyer mortgage advice for Londoners and shares tips for any first-time buyer London concerned about their homeownership prospects.

Finding the Right Place to Buy as a First-Time Buyer London

Prices in London vary considerably, and sometimes the best first-time buyer mortgage advice is to expand your search area or consider properties within a commute that are more affordable and still qualify for first-time buyer London support schemes.

Lower-cost areas for a first-time buyer London can include Barking and Dagenham, Newham and Bexley, among other locations on the outskirts.

Even with assistance such as the first-time buyer mortgages government scheme, a first-time buyer London would find it difficult, if even possible, to mortgage a home in the more expensive areas, including Kensington, Chelsea and Westminster.

We’d also suggest that a first-time buyer London think about their living costs, commuting expenses and council tax. Aside from first-time buyer schemes, London boroughs set independent council tax rates – some areas charge double the amount than others.

When you apply for a mortgage or first-time buyer schemes, you’ll be asked about your income and outgoings, so if you’ve done your research and can demonstrate you meet affordability requirements, it’ll be much easier to proceed.

First-Time Buyer Mortgage Advice in London

It’s worth getting first-time buyer mortgage advice before you start comparing products and lenders because you need to know how much you are eligible to borrow as a first-time buyer London and which first-time buyer schemes you may qualify for.

Your income, credit rating and intended purchase value will all dictate the amount of deposit you require and whether you'd able to access help for first-time buyers.

Most banks and lenders will offer a first-time buyer London up to a maximum of 4.5 times their income. Still, that multiplier can be higher or lower depending on several variables.

For example, a first-time buyer London earning a salary of £30,000 should be able to borrow roughly £135,000 as an upper limit, or £270,000 if applying with a partner making a similar amount.

However, a first-time buyer London lender won’t solely consider your income. They’ll also look at your other debts, credit score, average outgoings and any first-time buyer schemes they need to factor in.

There are various online calculators offering information about first-time buyer schemes. Still, we recommend speaking to an independent, professional broker if you need help for first-time buyers since online tools are rarely accurate or comprehensive.

Understanding Non-Standard Properties as a First-Time Buyer London

First-time buyer schemes and mortgages are not universal, and there are some properties that may be more difficult to secure a mortgage against or to qualify for help for first-time buyers.

  • New builds can be trickier to mortgage as a first-time buyer London because lenders usually limit the maximum Loan to Value available at around 85% of the purchase price, of 75% on a flat. That is because first-time buyer London properties that are newly built might depreciate sharply in resale value once they have already been lived in.
  • Studio apartments are often a cost-effective option for a first-time buyer London, but the difficulty of selling a compact apartment may mean lenders place minimum floor space sizes on the properties they will mortgage.
  • Buying a leasehold as a first-time buyer London can be challenging if the lease has under 80 years to run – the potential for the property value to drop is higher.

If you need first-time buyer mortgage advice for any property in London that falls into one of these categories, please get in touch with Revolution Brokers at your convenience.

Applying for Help for First-Time Buyers in London

Fortunately, there are a few initiatives offering help for first-time buyers, although not all first-time buyer schemes will be applicable to every purchase.

The first-time buyer London Help to Buy scheme has now closed to new applicants, but there are a few alternatives you might wish to consider.

Shared Ownership for a First-Time Buyer London

Shared Ownership is among the more popular first-time buyer schemes in London, as a buyer can split the cost of purchasing a home into chunks. Rather than trying to find first-time buyer mortgage advice to borrow the full value, this first-time buyer mortgages government scheme means a buyer can purchase between 25% and 75% of the ownership.

The first-time buyer London pays a small rent on the balance to the respective housing association and can purchase other chunks to work towards 100% ownership.

First-Time Buyer Mortgages Government Scheme

The mortgage guarantee scheme is another of the first-time buyer schemes you might consider. The government guarantees the mortgage, allowing a first-time buyer London to purchase a home with a small 5% deposit.

While that doesn’t mean you won’t need first-time buyer mortgage advice to select a lender with a product that is incorporated into these first-time buyer schemes, it may be useful to use any help for first-time buyers you can access.

Low-Cost Housing for a First-Time Buyer London

A new scheme to develop low-cost new build properties reserved for first-time buyer London residents is not yet live but is backed by a housing association and the mayor’s office, aiming to provide help for first-time buyers purchasing homes worth up to £350,000.

Depending on how the scheme develops, the idea may be that a first-time buyer London needs to make an offer within two months, at which point properties will become available to other buyers.

Help for First-Time Buyers in London

There are further first-time buyer schemes specific to London, called London Living Rent, London Affordable Rent and Social Rent.

London Living Rent applies to any middle-income first-time buyer London and provides help for first-time buyers who cannot purchase a home. The scheme promises to offer three-year minimum tenancies with below-average rent to allow tenants to save up and then have the option to buy their first-time buyer London home on a Shared Ownership.

Eligible applicants must be a first-time buyer London who is currently renting, earns up to £60,000 a year as a household, and be unable to purchase a property. This range of first-time buyer schemes is expected to be live in the next two tears.

Professional First-Time Buyer Mortgage Advice in London

We recognise that being a first-time buyer London is a somewhat different experience than in other parts of the country, where first-time buyer mortgage advice may be more based on finding the best interest rates or securing help for first-time buyers to raise a deposit.

London property prices are extremely high, and we can provide tailored help for first-time buyers trying to establish the best way forward.


Who Qualifies as a First-Time Buyer London?

Some of the top first-time buyer schemes have different caps and allowances for first-time buyer London applicants because of the differential between average prices in the capital and those elsewhere in the UK.

Most first-time buyer London applicants qualify if they have been living in London, as their primary residence, for at least 12 months or have a permanent job in London.

What Are the Best First-Time Buyer Schemes for Londoners?

There aren’t any specific first-time buyer schemes that are universally applicable since much depends on your circumstances, financial position, the amount you wish to borrow, and the value of the property you plan to purchase.

If you’re interested in any first-time buyer mortgages government scheme, please get in touch, and our expert consultants will happily offer independent help for first-time buyers to pinpoint which options may be most useful.

What Is the First-Time Buyer Mortgages Government Scheme?

There isn’t one individual set of first-time buyer schemes, and you’ll find varying options from a Lifetime ISA to boost your savings to Shared Ownership and guarantee mortgages, where you can proceed with a participating lender provided you have a 5% deposit.

The guarantee scheme offers a guarantee to make it easier for lenders to consider first-time buyer London applicants with a minimal deposit, who might otherwise not have qualified.

Where Can I Get First-Time Buyer Mortgage Advice?

We always suggest asking an independent whole-of-market broker for first-time buyer mortgage advice rather than relying on price comparison sites or a bank advisor.

Advisors in banks or working on behalf of a lender providing first-time buyer schemes can only recommend the products offered by the lender, and you might find that specialist first-time buyer mortgage advice could save you a considerable amount on your mortgage repayments.

It's also never wise to rely on comparison sites for help for first-time buyers since these sites tend only to feature the banks and lenders who have paid to advertise there, reflecting a fraction of the mortgage and missing out on some of the best first-time buyer London products.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.