When it comes to buying a home, there are several things to consider with respect to your finances. The amount of money that you must pay each month on your mortgage is significant but for many buyers, it is the deposit that they have to provide that is the biggest issue to buying a home. First-time buyers face a challenge in raising the sums of money associated with the deposit when buying a home, and this is the case in London.
In fact, a recent study indicates that first-time buyers in the capital have to place a deposit that would be big enough to buy them a home in many other parts of the country and London deposits are a hot topic. The average starter home in London comes in close to £420,000 and this means the average deposit for a London starter home is £114,952. Having to put down 27% of a home is a big step for anyone and it is easy to see why many first-time buyers struggle when it comes to purchasing property.
London deposits: Money goes further outside of the capital
With respect to what else you could do with this money; the answer is quite a lot when you look around England. This amount of money would purchase a three-bedroom terraced property in Scarborough, it would allow the buyer to purchase a two-bedroom cottage property in the Midlands or it could buy a one or two-bedroom flat, of a good standard, in Essex or Norfolk.
These comparisons will make many property buyers wince but there are reasons why people must pay the higher price in London as opposed to look around the country. People looking for a home in London often have work or family related commitments that mean they have to find property in the capital. If it was possible for people to find similar employment in other parts of the country, there wouldn’t be such a demand for homes in London but as everyone knows, London is at the heart of life for many people, firms and industries in the UK.
Buyers must be realistic with property plans
Therefore, many buyers must face facts that they need to find more money in order to afford London deposits. In this regard, it is vital that people save as much money as they can, and some tip to increase the size of deposit on offer include:
- Work an extra job or ask for additional hours in your current place of work
- Sell items that you no longer need
- Engage the gig community and provide work online
- Reduce non-essential spending
- Make coffee and lunch at home as opposed to buying at work
- Study the Help To Buy schemes on offer to assist people on to the property ladder
- Ask family members if they can support a property purchase
Many families are not able to support their loved ones in this manner, but it is fair to say the Bank of Mum and Dad has helped many households get on to the property ladder.
Stepping on to the property ladder in London is difficult but if you are looking for support and guidance, contact me as I am always happy to help.
CEO, Kings Accommodation