London has seen a boom in property prices over the past five years when the rest of the UK has seen fluctuations and a fall in house values.
Because of the increased prices in the London area, more and more first-time buyers are finding themselves priced out of the market and unable to afford decent houses for sale in the area. A typical first time buyer will have to spend over three thirds of their income on mortgage payments alone after national insurance and tax.
But there are pockets of areas in London that still allow first-time buyers to buy cheaper property and there are also ways to spot cheaper properties with a little visionary execution and imagination.
Extend and increase space
First-time buyers can buy properties and get planning permission to convert the loft space or alternatively build an extension to the property to increase the space. Victorian houses, particularly terraced two-up and two-down properties, are abundant in London and some of them offer loft space to convert and garden space that could allow an extension. First-time buyers could buy a cheaper property and then make it larger, as well as increasing the value of the property. It is advisable to check planning laws with the local council before proceeding with a purchase.
Do a property up
Another great way of buying a cheaper property is to buy a neglected house and do it up. Some properties in London are crying out for some love and affection and for those buyers that are bold enough, refurbishing a home can be a satisfying experience. A realistic budget for works, demolition and new interiors and fitting should be set and a proper project plan put in place. A refurbishment and upgrade to a property will undoubtedly add value to it.
Buy in less desirable areas
There are many areas in London that are diversely different to each other. There are also areas that are considered trendy and chic to live in. A good idea would be to look at less desirable areas, particularly those of neighbouring trendy and chic parts of London which could possibly have the potential to become a desirable area in the long-term. When an area becomes too popular and overpriced, buyers will look at the neighbouring areas and start moving to those. Property in the less desirable areas will be much cheaper and more affordable and would be a good investment. A knock-on effect will usually take place which has recently been seen in parts of London such as Clerkenwell, Peckham, Balham and Brick Lane which are now considered very desirable places to live. Once a place is considered desirable then boutiques, cafes, specialist shops and restaurants start to spring up in the area.
Look in regenerated areas
The UK Government and the Mayor of London is putting money into many areas in London to regenerate poorer, neglected areas and create new homes, business space and community spaces. One such area is the London Thames Gateway regeneration programme The Thames Gateway is the UK’s largest economic development programme which covers forty miles along the Thames Estuary from the London Docklands to Southend in Essex and to Sheerness in Kent. The regeneration area also includes the redevelopment on Stratford in light of the Olympics. Another area that is receiving funding for regeneration is the borough of Lewisham. All of these regeneration projects will mean that properties in these areas will be more affordable to buy in to start with, but as the local area and economy improves they will undoubtedly increase in value.
Sonya is a writer for What House?, an online property portal specialising in new homes in the UK. She also advises on property for sale and mortgages. Go to http://www.whathouse.co.uk for further information.