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A Guide for First-Time Buyers Purchasing Property In The Capital

October 23, 2019

First-time buyers make up nearly half of property transactions in London. During the first nine months of 2019, 44% of home purchases were by first-time buyers. This has grown from 36% in 2015 and is even the highest percentage since at least 2007. Additionally, in just the second quarter of this year, 9,960 first-time buyers’ mortgages were completed in London, according to UK Finance. This figure has increased by 1.2% compared with last year at this time.

With the property market having slowed down since the Brexit referendum, current market conditions provide a good opportunity for first-time buyers and investors to take advantage of lower asking prices, especially in London. Stamp duty breaks for first-time buyers and the Help to Buy scheme have also helped people in the capital step onto the property ladder, which has been reiterated on The Times.

Since stepping onto the property ladder can be overwhelming, here’s a guide for buying your first home in the capital.

Boroughs with the most first-time buyers

There are a few boroughs in the capital that have seen especially large numbers of first-time buyers purchasing property lately. Homes & Property revealed first-time buyers have made up over half of all deals in both Haringey and Newham. As a popular area, Haringey is considered the fifth most in-demand borough in all of London, according to data from Rightmove.

In Wandsworth, purchasers stepping onto the property ladder accounted for 49% of all sales. And first-time buyers in Waltham Forest and Tower Hamlets made up 48% of the market, showing a variety of areas throughout London are seeing high numbers of first-time buyers.

Cheapest areas to buy in the capital

The average first-time buyer in London spends £359,220 on their home, but there are boroughs with more affordable prices. Another recent Home & Property article revealed the most affordable areas for first-time buyers in London based on data from Post Office Money. Out of the capital’s 32 boroughs, 13 are considered unaffordable for first-time buyers as average home prices exceed 4.5 times the price-to-income ratio.

Across London, the cheapest borough to buy a property in is Barking and Dagenham. The average property price there is approximately £310,000 and 95% of the properties are considered affordable for first-time buyers, while in Bexley, 54% of properties are viewed as affordable.

Forest gate 2 bed

2 bedrooms, 2 Bathrooms | Shakespeare Crescent, Manor Park, E12

£300,000 (Leasehold)

View more properties for sale in Forest Gate.

ilford first time buyer

1 bedroom, 1 Bathroom | Express Drive, Goodmayes, IG3

£175,000 (Leasehold)

View more properties for sale in Ilford.

Deposit needed for a mortgage

If you’re looking to buy a house, especially for the first time, it’s important to know approximately how much of a deposit you’ll need to save for a mortgage. Portico Finance would advise on typically needing a deposit of at least 5% of the property’s price to secure a mortgage in the current market.

Many people, especially first-time buyers, put more of a deposit down to have cheaper monthly repayments, a better mortgage deal, and an improved chance of being accepted. According to research from Halifax, the average deposit put down by those purchasing their first house was 16%. Let’s look at a couple of properties currently for sale as examples. This two-bedroom house in Barking and Dagenham is on the market for offers in excess of £289,995. A 5% deposit would come to more than £14,500, while a 16% deposit would be over £46,400, depending on the agreed offer. A two-bedroom flat in Newham is on the market for offers in excess of £375,000. A 5% deposit would be more than £18,750, and a 16% deposit would be over £60,000.

If you are a first time buyer and looking for a mortgage then you can speak to Portico Finance, drop them an email at or give them a call on 020 7731 9680.!!!!

forest gate first time buyer

2 bedrooms, 1 Bathroom | Comyns Road, Dagenham, RM9

£289,995 (Freehold)

View more properties for sale in Forest Gate.

Securing a mortgage

Record low mortgage rates have also been a factor for the higher number of first-time buyers. To start, it’s helpful to figure out about how much you can borrow. As a general guideline, mortgage lenders can typically loan up to 4.5 times the total yearly income of you and anyone else you’re purchasing with.

Lenders also look at other factors, such as debts you owe, your credit score, average spending, and other personal circumstances. How much deposit you put down also typically impacts your interest rate. It’s best to talk with an impartial broker for an accurate view on how much mortgage you’ll be able to get based on your circumstances.

Portico Finance have access to over 70 lenders so can help you secure the right mortgage to suit your needs. 

fulham first time buyer

Studio, 1 Bathroom | Dancer Road, Fulham, SW6

£310,000 (Freehold)

View more properties for sale in Fulham.

battersea first time buyer

1 bedroom, 1 Bathroom | Wix's Lane, Clapham, SW4

£350,000 (Share of Freehold)

View more properties for sale in Battersea.

London Help to Buy scheme

The Help to Buy scheme across England, Scotland, and Wales is benefiting many first-time buyers. With an aim to help people buy houses, the government offers equity loans people can put towards the cost of a home. Considered to be more generous than schemes anywhere else in the UK, the London Help to Buy scheme allows you to apply for an equity loan of up to 40% of the property’s value if you’re buying a new-build worth £600,000 or less in Greater London.

This scheme allows you to put down a 5% deposit and borrow up to 40% of the property value from the government. Then, you take out a mortgage on the rest of the value, which can potentially help you unlock better interest rates and improve your chance of being accepted for a mortgage.

For the initial five years, the equity loan is interest-free. However, after that, you’ll need to pay a monthly admin fee, which starts at 1.75% of the loan. And the loan will need to be paid in full after 25 years, when the term of your mortgage ends, or when you sell the house – whichever happens first. The scheme has pros and cons, and it’s best to seek professional advice to decide whether it’s right for you.

walthamstow first time buyer

1 bedroom, 1 Bathroom | Thornbury Way, Walthamstow, E17

£91,250 (Leasehold)

View more properties for sale in Walthamstow.

A great opportunity for first-time buyers

With lower property prices, stamp duty breaks, and schemes available to first-time buyers, now is a great opportunity to take that first step onto the property ladder. Certain boroughs within the capital offer property values much lower than the average London property price of £618,587, opening up opportunities for first-time buyers.

If you are looking to buy in London, search for properties for sale here or give us a call on 0207 099 4000.!!!!

If you are yet to secure a mortgage or interested in finding out what else could be out there as an option for you, contact Portico Finance who will be able to help you find the right mortgage for you.

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