First Time Buyers in London: An Estate Agent’s POV

First time buyers in London face an extra set of challenges. So we've asked long-established London estate agent Jeremy Leaf to give us his point of view and explain what all first time buyers wanting a property in the capital need to know.

Jeremy Leaf Founder, Jeremy Leaf estate agent

Top tips for first time buyers in London

As a founder of a long-established North London estate agency, Jeremy Leaf & Co, and a former RICS Residential Chair, I feel first time buyers in London face an even greater set of challenges than those buying outside the capital with its unique housing market. If you’re a first time buyer in London, here are my top tips on how to navigate the process.

1 Build your first time buyer deposit

First time buyers in London face a particular challenge because of the inherently high house prices and deposits required. According to Halifax, the average first time buyer paid £511,514 for a house in London in 2024, putting down an average deposit of £124,688. By comparison, the average first time buyer house price across the UK in 2024 was £311,034, with an average deposit of £61,090.

So unless you’ve already got a hefty deposit, help from the Bank of Mum and Dad (or grandma and grandpa) or inherited wealth, it can be very difficult. So if you’re a first time buyer in London, here’s what you need to do:

• Have a plan: Noone plans to fail but you can fail to plan which can result in wasted time, trouble and cost! If you’re a first time buyer in London you can’t afford not to make decisions about saving money long before you actually take that step onto the ladder. Having a long-term strategy gives you time to build as big a deposit possible. This will give you more flexibility when it comes to buying a house.
• Research savings schemes: Make sure your deposit savings are in the best place. If you’re under 40 you can open a Lifetime ISA; you can save up to £4,000 into a LISA each tax year and the government will give you a 25% bonus up to £1,000 a year. But you can only use LISA savings to buy a house worth under £450,000 or your retirement which can means they’re not suitable for many first time buyers in London. If a LISA isn’t right for you, explore other savings options.  
• Can you get help from the Bank of Mum and Dad with your deposit? This could speed up how quickly you can buy your first home in London. But check what strings might be attached if you do. Read on for more on this.

2. Find the best area for first time buyers in London

Finding the best area in London to buy your first home is key. Here are the steps to take:

• Take the time to see what suits you. Look at where you travel to for work but also for family and friends. This will help you see which areas of London are more likely to suit you as a first time buyer. It may be these areas are further out but that the journeys you need to make are straightforward.
• Be open to new areas: Consider areas of London that you may not be particularly familiar with if they suit your requirements. As a first time buyer, don’t get fixated on one particular area.
• Popular up-and-coming areas especially on the fringe of better areas are worth checking out for first time buyers as they may represent better value for money.
• One tip for first time buyers is to follow retailer openings such as Pizza Express, Gails – even estate agents Foxtons!
• Be realistic: Any area in London will have some disadvantages. It’s always a balance.

3. Investigate London first time buyer schemes

Can you make buying your first home in London more affordable by using a first time buyer scheme?

First Homes Scheme London

The government’s First Homes Scheme offers first time buyers the opportunity to buy their home at a 30% discount, which stays with the property when you sell. To be eligible, you’ll need to be a first time buyer in England buying a new property and have a household income of less than £80,000 (or £90,000 in London). However, the First Homes Scheme is designed to help people get on the housing ladder in their local area, so eligibility criteria is set by the local authority and may differ.

First Homes Scheme homes are extremely limited. However, a First Homes Scheme development in Bermondsey, London, was announced by Barratt London in October 2024. So look out for any First Homes Scheme developments in London that may suit you and be prepared to act fast if you do.

Consider private schemes

There are also private schemes in London that may suit first time buyers. For example, Pocket Living offers homes at least 20% under market value to first time buyers who live or work in London and meet certain income requirements.

Investigate shared ownership

Shared Ownership involves buying a share of a property and paying rent on the remaining share. This may seem appealing if you can’t afford to buy a house or flat outright. In principle it’s a great idea because you know you’re only paying a certain amount of the purchase price and if the market picks up, your equity increases.

But be aware that shared ownership schemes are complicated and vary so investigate each on it’s own merits and especially look at how easy it will be to sell in future. For example, whether there are limitations on who you have to offer it to when you sell and how it’s valued.

4. Get clued up about leasehold

Generally speaking, a freehold house, even a small one, is better than buying a leasehold property. Although obviously, the figures will have to stack up. And in London, most first time buyers will be buying a flat and most flats are sold as leasehold.

If you’re a first time buyer and buying a leasehold property in London, here are some tips:

• Look for maisonettes. A maisonette will have its own entrance and be without common areas – this is a big plus because you won’t have to pay to maintain and insure any common areas in the service charge. So this could reduce the long-term costs. Although you’ll need to look at the overall figures and check the details in the lease. If you’re having to pay significantly more for a maisonette it may not make financial sense.
• Check the lease length: If you’re buying a leasehold property, look for lease lengths of over 100 years if possible. Currently, properties with leases below 80 years lose value very quickly because extending the lease gets much more expensive as you’ll need to pay ‘marriage value’. Marriage value is set to be abolished under the Leasehold and Freehold Reform Act but while this is now law, it hasn’t yet come fully into effect. And no-one knows for sure when marriage value will be abolished. Until then, the current rules stand.

If you’re buying a flat, then chances are you’re buying a leasehold. To understand what leasehold means, see our guide on Leasehold vs Freehold and check out our guide to the range of leasehold charges to be aware of when you buy.

5. Seek local opinion

To find out what it’s really like to live somewhere, be nosy. So before buying a flat in London, visit the street at different times of day and talk to people in the same building or next door. Who is living there – are they tenants or owner-occupiers – how long have they lived there for and do they like it? People can be very chatty, they love sharing information. You could find people are happy or you could find there’s someone who regularly has noisy parties.

Some people I’ve given this advice to have found it very helpful, for example they’ve found out all the people in the block were renting from the council or that it’s very noisy at weekends. While others have been glad I recommended them visiting in rush hour and at school drop off and pick up as well as during the day.

6. Check Bank of Mum and Dad ground rules

Check if any money from the Bank of Mum and Dad comes with strings attached such as on repayment, the area, input and viewings etc before making any decisions. For example, I have found that:

• The parents may want their child to move into what they regard as a suitable area near to them rather than an edgy area where the child wants to live to be near their friends, without perhaps considering as much the longer term implications or consequences of that decision making. Although if an edgier area has investment potential, that could better impress the Bank of mum and dad.
• And it’s very common when a first time buyer wants to take mum and dad to show a property and invariably the first question is ‘No darling, can’t you do better than this?’ Because you know the child has seen maybe 20 properties and decided this is the one. This leaves the child thinking they’ve just wasted three months looking at properties.

To avoid these situations, children should do their preparation. Find out from the outset what your parents expect from you if they give you a house deposit. First time buyers may find involving their parent in the property search from an early point helps.

7. Explore your first time buyer mortgage options

Finding out how much you can borrow on a mortgage is key. You’ll usually need at least a 5% deposit to get a mortgage. Some lenders use the government-backed mortgage guarantee scheme to offer these 5% deposit mortgages, but many lenders offer these mortgages without using the scheme.

But if you can save at least 10% or more you’ll usually get access to a wider range of mortgage deals and at better rates.

However, you can get mortgages with no deposit. For example, Skipton Building Society offers a 100% mortgage for those with a ‘track record’ of paying rent. And you can also get 100% guarantor mortgages if you have a loved one who is prepared to put up savings or a property as security against the loan. 

8. Beware of stamp duty thresholds

Changes to first time buyer stamp duty relief that came into effect on 1 April 2025 mean stamp duty bills will go up for many first time buyers.

As a first time buyer, you’ll pay stamp duty on properties over £300,000 (this is a reduction from the previous threshold of £425,000). You’ll then pay 5% stamp duty on the portion from £300,001 to £500,000. And if the price is over £500,000 you cannot claim the relief. This means you pay standard stamp duty rates. This threshold has been reduced from £625,000.

Stamp duty for first time buyers in London examples

• The stamp duty bill for a first time buyer in London is £15,575. This is based on the average first time buyer property property price in London of £511,514.
• This is £11,250 more than the £4,325 stamp duty bill first time buyers in London would have faced for buying the same property before the stamp duty rules changed.

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