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Yes, it’s still a great time to buy your home in London

By Sophia Wood-Burgess

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London is a fantastic place to own property, both as a place to live and an investment in your future, regardless of any rises and falls in the greater UK property market. However, with a national focus on interest rates, we've been asked: is it the right time to buy in London? Our experts say yes, there are many beautiful homes available and more reason than you'd expect to buy one now. Here are our top five reasons to buy:

1. A resilient city; your best investment

This is a reason for the forward-thinker because London properties tend to have excellent capital growth.

London is a beloved global city with unshakeable appeal. Excellent transport, green spaces and access to culture and entertainment are common themes across its neighbourhoods. London is also an old and well-established city, so supply of new property is a natural limiting factor that’ll prop up demand in the coming years.

Looking back over the past 20 years, despite all economic pressures, house prices have risen in London. Of course, each home and local market is unique, but it’s still well known as a promising investment for prospective buyers.

2. Make it yours

For the first reason, we went into the facts, figures and future. Now let’s take it the other way with your day-to-day life right now. There is a particularly grand feeling about owning the walls around you. You can decorate, renovate and well-and-truly claim a piece of the Capital for yourself. It’s a brilliant feeling when you aren’t navigating a professional relationship in your personal space.

As well, moving into the right home, with the right size and the right features for your lifestyle and situation, can have a hugely positive impact on your daily life.

And sure, this is an emotional reason for a big purchase, but as they say, home is where the heart is.

3. Lock in your 5-year fixed rate

Photograph: Analysis of house prices over the last 20 years from Foxtons 2023 London Report

We all hope to buy when house prices and interest rates are at their lowest, and to sell when house prices are high to get the most out of our investment. Of course, it’s not recommended to try and “play the market” because, as much as we can make educated guesses, none of us know what the highest and lowest will be or what way it’ll go next. As well, since this is a long-term investment, the slightest lifts and falls in the market don’t make that much of a difference.

All of that being said, it’s a relatively good time to buy, as we’re not in a sweeping sellers’ market. There are still opportunities to get a decent mortgage rate (though we recommend getting in touch with a mortgage broker like Alexander Hall to see the best range of products), as the core inflation rate is finally going down. As the market may stabilise in the coming years, these properties have the potential to deliver excellent returns on investment.

4. Paying rent vs paying a mortgage

It’s not a secret that rent prices are high in the Capital. And now, as we head into peak lettings season and competition increases, switching to a mortgage may sound more appealing – after all, you’ll be paying into your own investment. Despite Help to Buy ending, we are seeing quite a few first-time buyers making a move (read our article on why first-time buyers are so motivated in the 2023 market).

Year Sales Price Mortgage Payment (15% deposit) Interest element of mortgage Rent Payment
2021 £372k £1046 (2%) £530 £1,529
2022 £386k £1262 (3%) £820£1,885
2023 £376k £1560 (4.9%) £1,300£2,019

According to data by our partner mortgage broker, Alexander Hall, in the last 3 years, despite rising interest rates, average monthly mortgage payments still remained cheaper than average rent in London.

5. "You make money when you buy"

What does this old estate agency adage mean? Essentially, if you make a smart purchase at the right price and in a promising location, you can build a foundation for a successful investment. If you have the opportunity to buy a home in London now, you’ve got an asset you can make the most of when it finally comes time to sell again.

Whether you’re looking for a strong investment in your future, you want the freedom of owning your own home or you’d rather pay a mortgage than rent right now, it is absolutely a good time to buy.

Next steps:

Any questions? Get in touch with your local Foxtons team.

If you’re a homeowner considering a move, book a valuation to see what your property can achieve in the current market.

For a better understanding of what you can afford for your first or onward move, book in a free consultation with Alexander Hall mortgage brokers.

Ready to start your search? Browse our homes on the market or register your property search on My Foxtons, so we can tell you about new listings sooner.

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