If buying a house is one of the most stressful events in the average lifetime, you have to wonder what finding a home in London does to a person. Between first-time buyers, young professionals moving up the ladder and investment moguls with endless pockets, there’s an insatiable demand for property all over the capital.

The London housing market is fierce, fast-paced and at least £200,000 more expensive than its nearest UK equivalent, so it pays to be well-prepared before you start your search. Over the years we have helped hundreds of clients purchase their perfect property all over the city, and are happy to share our latest tips with you.

Why buy a property in London?

The sprawling metropolis of London is overflowing with more culture, history and entertainment than most people could absorb in a lifetime. As well as being the most-visited city in the world, its booming economy (comprising mainly of financial services, media, technology, professional services and retail) accounts for approximately 30% of the UK’s GDP and creates millions of jobs for people from all walks of life.

Living in London means being right in the heart of this vibrant, pulsing hub. Where else can you indulge in some designer retail therapy at the world’s most prestigious department store and wander iconic film locations in between enjoying Europe’s largest street party and attending a star-studded world film premiere?

Whether you’re seeking a long-term home for your family, looking to increase your investment portfolio, or simply hoping to capitalise on the opportunities available, you won’t be disappointed with what you find in the heart of London.

Why is London so expensive?

It’s status as a global leader in finance, technology and culture means that the demand of London life is at a constant high, and there is a seemingly endless supply of motivated, upwardly-mobile people looking for attractive places to live. The number of homes in desirable areas always falls short, allowing property values to soar well above the average income.

Average House Prices in London 20070-2017
Data from the Office of National Statistics House Price Index

While property values have seen a slight dip in the last few months, London remains one of the most desirable cities in the world to live in, and past experiences have demonstrated that the market always bounces back.

Getting to know London

London is made up of 33 boroughs, distinguished not only by postcodes but by their diverse personalities, distinctive landmarks and varied property values. These boroughs can be loosely divided into five separate sub-regions of London; Central London, North London, East London, South London and West London. If you’re looking to buy a home or make an investment anywhere in the capital, finding the area that fits your lifestyle and budget is important.

Central London

Central London refers to the very heart of the city, which is positioned across the Thames. North of the river, Central London comprises of the City of London, most of Westminster, and the most central parts of Camden, Islington, Hackney and Tower Hamlets. To the south, the innermost parts of Southwark, Lambeth, Kensington & Chelsea and Wandsworth make up the rest of Central London.

In this part of the city, you can expect to find the highest-density housing, peak land values and swathes of significant organisations, including government offices, business headquarters, global institutions and international embassies.

North London

Technically comprising of Barnet, Enfield and Haringey, “North London” typically embraces the outskirts of Camden, Islington and Hackney, too. Homes with a postcode starting with an “N” typically enjoy a suburban feel, trading nightclubs for green open spaces. That’s not to say that nothing goes on in North London; quite the opposite. Home to the Emirates Stadium, Kenwood House and Trent Park, there’s plenty of things to keep the family busy all weekend.

South London

South London is known for its green spaces and urban villages, which sprawl across Kingston upon Thames, Wandsworth, Merton, Sutton, Croyden and Bromley. Here, you can relax in some of the best parks in the city, like Clapham Common and Richmond Park, or head to the now-trendy hotspots of Brixton and Peckham to enjoy their youthful, urban scene.

East London

Historically known for being a little rough around the edges, East London residents have witnessed a huge transition over the last few years and more people flock to its creative, vibrant atmosphere. The sub-region of East London covers Barking and Dagenham, Bexley, Greenwich, Lewisham, Havering, Newham, Redbridge and Waltham Forest, as well as the outer areas of Hackney and Tower Hamlets.

West London

Last but far from least is West London, home of Hillingdon, Harrow, Ealing, Brent, Richmond upon Thames, and Hammersmith and Fulham. Its upmarket reputation is widely acknowledged, and the area is known for classic architecture, world-class museums, high-end boutiques and of course, Buckingham Palace.

Row of beautiful white edwardian houses in Kensington, London

How does London transport affect the housing market?

In case you’re not familiar, London is divided into Travel Zones, arranged concentrically with Zone 1 encompassing Central London, Zones 2-6 covering the increasingly suburban areas of the city, and Zones 7-9 representing the furthest reaches of the travel network.

Don’t underestimate the impact that public transport has on where people choose to live in London. It’s an essential part of getting around the city, and connections greatly the affect the desirability and price of the local area. Combining the usage figures for London buses, the underground and overground, DLR service, trams and river services reveals that almost 3.8 billion journeys were made on public transport last year, so be sure to consider where the nearest station to your home will be before you commit.

While it might be obvious to assume that the cheapest property can be found on the city outskirts, that’s not necessarily true. Rather than looking for homes at the end of a tube line, buyers can often find better value by moving inwards two or three tube stations – presumably because they are no longer guaranteed a seat on the commuter services.

Ultimately, everyone wants to live near a convenient tube station. Only last year, an adaptation of the network map was released with average property prices listed at every single underground station. As you can see, even the eight-minute Metropolitan line journey between Wembley Park and Finchley Road leaves a gap of approximately £1m in house values. Even looking at homes that are ten or fifteen minutes’ walk away from a station will have a substantial effect on price, and areas where late-night services operate are equally popular.

The take home from this is that investors hoping to find lucrative rental properties will be well-served by homes within a five-minute radius of good transport links, while buyers that are looking for a lower price-tag and better value should be prepared to compromise with a short walk each morning.

Where should you invest in London?

If you’re looking for a property to boost your investment portfolio, you’ll need to be savvy. Yes, with a near-constant demand for housing you’ll certainly be at no shortage for tenants, however it is easy to over-spend in London, and buying property in the wrong area will result in slower rental price growth. Here are three locations with a particularly promising growth forecast.

Woolwich, SE18

At the moment, properties in Woolwich start at £330,000, with relatively low rental values. However, the planned Crossrail route has sent development into overdrive, as commuters will be able to reach Canary Wharf and the City in under 15 minutes once it’s up and running.

Make the most of Zone 4 price tags while they last, or snatch up a deal on the £1.2bn Royal Arsenal Riverside development, which is set to become the heart of this boom.

Hackney, E8

Hackney is an excellent investment spot if you’re looking for continuous demand. With a trendy reputation and excellent Overground links to central London, it’s really a sweet-spot for a city life that appeals to all kinds of renters. Average values are hovering around £600,000, with apartments costing around £480,000. For a reasonable 2-bed you can expect a monthly income of around £1600.

Wood Green, N22

At the beginning of 2017, Haringey borough council agreed to a £2bn investment to create 5,000 new homes and a new central hub for Wood Green. This is expected to bring a substantial regeneration push for the rest of the area, bringing in fresh tenant interest from around the city.

With planned improvements to the Piccadilly line, money going into the Great Northern line and potential for the Crossrail 2 plans to pass through the area, an investment in Wood Green will pay huge dividends at the city grows, if not in the immediate future.

Where is the cheapest property in London?

The housing market in the capital is highly competitive, and the cycle of redevelopment is exceptionally fast. What might have been an inexpensive urban enclave six months ago has almost certainly become an investor haven with soaring property values already.

However, there are still many spots across the city that offer a relatively affordable place to live. Depending on what your expectations for property are (sound investment, starter home, family-friendly environment), here are a few suggestions to help you get on the ladder.

Acton, W3 / W4 / W12

Acton is the perfect set-up for any family looking to live in West London without spending six-figure sums. Based in Ealing, Acton is only a stone’s throw from Hammersmith and Kensington, but the average flat is currently valued at just £400,000. The area already has a lively buzz, with plenty of restaurants and shops, as well the family-friendly Acton Park and three markets a week on Acton High Street.

Getting to and from Acton currently takes around 40 minutes, via one of its five tube stations on the Central, Piccadilly and District lines. However, this will change dramatically when the new Crossrail route opens, and house values are likely to soar.

Haggerston, E2 / E8

Just fifteen minutes’ walk from the trendy hubs of Shoreditch and Hoxton, Haggerston residents get all the benefits of living near Old Street, at a fraction of the price. Haggerston Park and Victoria Park provide plenty of green outdoor space, while quirky cafes and bars are slowly opening up along the graffiti-lined streets.

It might be some time before it reaches the upscale ambience of nearby Canonbury, but with local property values currently around 26% below the London average, a home in Haggerston is ideal for a long-term investment for a low price.

Stratford, E15 / E20

The borough of Newham is generally considered one of the more affordable areas of London, and spots like Stratford are already experiencing a huge boost in property values. The former Athlete’s Village at the Olympic Stadium has been redeveloped into a housing and commercial hub, while older property stock is available without the premium price tag.

With huge improvements to the local public transport and infrastructure, it’s likely that the popularity of Stratford and its surrounding will continue to grow over the next few years.

Where is the best place to raise a family in London?

The second step on the London property ladder is notoriously difficult, with many families finding a disproportionate jump in price between starter-homes and those with a little more space.

Bexley, DA5

It might be on the outskirts of London, but the suburb of Bexley is exceptionally popular with growing families, as well as those looking to get onto the property ladder. Rated as one of the safest and most affordable places to live within the city, it’s easy to see why.

Average house prices are currently around £370,000, with property styles to suit those that need to juggle a central commute with young children. While it might not be the liveliest of suburbs, families can enjoy some great shops and restaurants within the community.

Nunhead, SE15 / SE4

Nestled between Peckham and East Dulwich, the urban village of Nunhead offers a warm sense of community. Perhaps due to its lack of tube station, the leafy streets feel a world away from the sprawl of the city, and welcoming pubs and independent shops make it feel more like its own town than almost anywhere else in London.

Just around the corner from green spaces like Peckham Rye, the varied housing stock offers comfortable homes for growing families, for around £550,000. Although you won’t benefit from underground services, you can still reach the heart of London via national rail from Nunhead station or Queens Road, Peckham, or Brockley.

East Dulwich, SE22

For those who are less price-sensitive, finding a home in Dulwich or East Dulwich can be a smart move as children grow up. Recognised for having access to an excellent selection of schools, very low crime rates and plenty of green open spaces (including the 72-acre Dulwich Park), East Dulwich also offers a buzzing high street, a local cinema and a busy weekend market.

Average property prices are currently around £700,000, which can secure you a beautiful Victorian or Georgian home with 3 or 4 bedrooms.

Read our other blog posts for more information about purchasing property or finding a home in London, or if you have already found the perfect place to live, get in touch with our team to arrange assistance with property surveys or conveyancing. At Daily Move, we’re dedicated to taking the stress out of moving house – even if you’re moving to one of the fastest-paced cities in the world!