Buying a house or flat in London

Average house prices in London

London is the most expensive place to buy a home in the UK by some distance. The average house price in the city at the end of 2023 was £508,000 – considerably higher than the UK average of £285,000, according to the Land Registry.

The chart below shows how average house prices in London compare with elsewhere in England.

The capital is also the hardest place to get on to the property ladder. The average price paid by a first-time buyer in London was £440,000 in December 2023, compared with £252,000 in England as a whole.

First-time buyers in London put down a hefty average deposit of £109,000 in 2023, according to Halifax. The UK average first-time buyer deposit was £62,000. 

• Find out more: how to save a mortgage deposit

London's cheapest and most expensive areas

London is undoubtedly an expensive place to buy a home, but property prices vary significantly depending on which borough you're buying in.

According to figures from the Land Registry, these were the cheapest areas of London in December 2023:

At the other end of the scale, the most expensive areas in London were as follows:

• Find out more: finding the best place to live

The cost of living in London

In addition to the costs of buying a house, you'll need to factor in additional expenses such as council tax and the cost of commuting.

Each borough sets its own council tax rates, meaning you'll need to pay significantly more in some areas than others. For example, council tax rates in Wandsworth are less than half of those in Waltham Forest.

You can use our interactive map to find out the average house price in every London borough. The table below the map also shows the council tax rates for 2024/25 and travel fares (last checked in Feb 2024) for each borough.

• Find out more: the household bills you'll pay as a homeowner

Getting a mortgage on a property in London

Getting a mortgage for a home in London can seem like a daunting task, especially if you're a first-time buyer.

Before you start looking for homes, it's important to work out how much you can borrow, to get an idea of the types of properties you can afford and how much deposit you'll need.

• Find out more: deposit calculator – how long will it take you to save what you need?

How much can you borrow?

As a general rule of thumb, banks will let you borrow around four-and-a-half times your total annual income. 

So if you have an income of £40,000 and you're buying on your own, you're likely to be able to borrow up to £180,000. If you're buying with a partner with the same income, this would theoretically double your borrowing power to £360,000.

A mortgage lender will also consider a variety of other factors such as your credit history, personal circumstances, any debts you owe and your spending.

While online mortgage-borrowing calculators will give you a rough idea of budget based on your income, it's worth speaking to an impartial mortgage broker for personalised advice on how much you'll be able to borrow.

• Find out more: how mortgage lenders decide how much you can borrow

Ready to get a mortgage?

Find the right mortgage using the fee-free service provided by L&C Mortgages

Compare mortgages

Mortgage broking service provided by L&C Mortgages

If you click on the link and complete a mortgage with L&C Mortgages, L&C is paid a commission by the lender and will share part of this fee with Which? Ltd helping fund our not-for-profit mission. We do not allow this relationship to affect our editorial independence. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

Property types that can be difficult to mortgage

New-build properties

Some mortgage lenders put stricter limits on the maximum amount they'll lend if you're buying a new-build property.

For example, you might be restricted to borrowing 85% of the value of a new-build house, or 75% on a flat, compared to 90% or 95% on an older property.

Studio flats

Due to their compact size and niche demand, studio flats can be a red flag to lenders as they may be trickier to sell when you're ready to move on.

As a result, you could struggle to get a mortgage for a studio apartment, or at least face some extra criteria such as a minimum floor-space requirement.

Short leases

Leases with fewer than 80 years remaining are often more expensive to renew, leading to the value of the property falling.

Lenders can be reluctant to grant a mortgage for properties with short leases, as they can be difficult to sell.

• Find out more: leasehold vs freehold and why it's important

Housing schemes for first-time buyers

Shared ownership

Shared ownership schemes are relatively common in London, as many buyers simply can't afford to purchase properties at full price.

It involves buying a share of between 25% and 75% in a property and paying rent on the remainder.

You can increase your share at a later date, known as 'staircasing', allowing you to build towards full ownership.

These schemes may appear attractive at first, but can be very expensive in the long run. Before buying, do your sums to ensure you'll be able to afford the combined cost of your mortgage payments, rent and any service charge.

• Find out more: shared ownership

London Living Rent

London Living Rent is an affordable housing scheme designed to help Londoners on to the property ladder. 

Properties are offered at below-market rents, so you can save the leftover cash each month and build up a deposit that will enable you to buy.

Tenancies, which cover how long you can live in the property, will be available for at least three years. During this time, you'll be given the option to buy the property on a shared-ownership basis.

To be eligible for the London Living Rent scheme, you must:

• be renting in London
• have a household income of up to £60,000
• be unable to currently buy a home (including through shared ownership) in your local area

First Homes

Launched in 2021, the government's First Homes scheme offers first-time buyers and keyworkers a discount when they buy a new-build home in England.

First Homes must be sold at a discount of at least 30% on the market value. To qualify for the scheme in London, you'll need to have a household income of £90,000 or less and be buying a home for £420,000 or less.

Local authorities can set their own criteria on who gets priority during the first three months a property is on sale. This might include applicants needing to have a local address or being keyworkers.

The government intends to build 10,000 homes a year across England under the scheme, so competition is likely to be high. There isn't currently a dedicated website where you can find which developers are building First Homes and where. Instead, you'll need to do your own research on developments in your area. 

• Find out more: First Homes scheme

Mortgage guarantee scheme

This scheme is aimed at buyers with 5% deposits, which is particularly common in London due to high property prices making it hard to save a higher percentage. 

When it launched, 95% mortgages were quite rare as lenders were nervous about lending such a high proportion of the property price in case the home fell into negative equity.

Through this scheme, the government guarantees 95% mortgages, making them less risky to lenders and therefore increasing the likelihood of mortgage applications being approved.

• Find out more: 95% mortgage guarantee scheme

Lifetime Isa

If you're saving up to buy a home in London, you can use a lifetime Isa (Lisa) to boost your deposit. 

A Lisa offers a 25% bonus on your savings. You can get the bonus on savings of up to £4,000 a year (so a maximum bonus of £1,000 each year).

When you buy your first home, you'll be able to withdraw your savings and the bonus. To qualify, the property you're buying must cost a maximum of £450,000.

• Find out more: lifetime Isas

Should you consider a London commuter town?

Choosing to live further out from the city can open the door to cheaper property prices.

Make sure you factor the cost of commuting into your budget, to ensure the potential savings you'll make on mortgage payments won't be cancelled out by rail fares. The reliability of trains can also be a drawback, so carefully research areas before settling.

The map and table below contain average property prices for London's closest commuter towns, cities and counties (split by local authority). 

• Find out more: how to buy a house or flat