Finding Property in London

Terraced House Property in London

Property Types
Boroughs
Council Tax
Agents
Renting
Buying

After you have decided to move, one of your first tasks is to find a property in London. Try to arrange a few home hunting trips before your move. You can also live first in a serviced apartment and search suitable areas and property with more time on your hands. This will also allow you to wait the arrival of your household contents in peace. There are many such apartments available in London.

London is a vast area, so you do want to restrict your home search within a reasonable distance from your work and good schools. As to house hunting, you are facing the same questions as everywhere else. Do you want to live in the centre of the city or in a more tranquil area? Are you looking for a flat or a house? Do you need to be close to the tube station and shops? Is it important to live in the catchment area of a good state school? When writing down your wish list, think what matters most. London is expensive, so be realistic about what your funds can afford.

The average property price in London is £484,716. However, there is a big fluctuation between areas: in Kensington & Chelsea the average house price is £1,287,850 compared to £276,145 in Barking & Dagenham. The median monthly rent for a three bedroom property in London is £1,793. In Kensington & Chelsea expect to pay on average £4,330 and in £1,195 in Havering.

Property Types in London

London is an old city, and many of its residential buildings are more than 150 years old. They can offer plenty of charm, but at the same time their layout might not be the most practical for today’s needs. Don’t be surprised to notice that some bedrooms, nicknamed box rooms, actually fit only a single bed. Also notice, that even though most properties have central heating, the poor insulation and single-glazed windows can still make them draughty. A higher price of a well insulated house or flat can be balanced out with the drop of the heating cost.

In addition to flats in big apartment buildings, converted flats are common in London. This means that a large house which was originally a single dwelling, has been converted into multiple units, each flat typically occupying one floor. A maisonette is a flat on two levels, or a flat that has its own entrance at street level.

Detached houses aren’t very common, and they can be pricy. More typical are semi-detached houses, where two homes share a wall, and terraced houses, where several houses in a row are joined together by their side walls. Terraced houses are sometimes also called town houses. Mews houses are former stables modernized into homes, and they are today highly desirable residences.

Listed buildings are properties that have great historical value, and hence have restrictions on what can be altered in them. However, the English love them, and are willing to pay more to live in one.

London Boroughs and Postcodes

Greater London is made up of 32 boroughs and the City of London Corporation, which covers the financial heart of London. Since boroughs run the local education, social services, housing, planning applications, environmental health and transport it is important to consider carefully which borough you are going to live in. Also, each borough has its own differing neighbourhoods.

Postcodes mark a smaller area than a borough, and understanding them is pivotal for your house hunting. The first letters in London postcodes define the basic area: WC for Western Central, EC for Eastern Central, N for North, E for East, SE for South East, SW for South West, W for West and NW for North West. The latter numbers and letters define the address to a smaller area, then to the correct street and finally down to the correct block.

In the property market people are willing to pay much more for houses or flats in nice, safer neighbourhoods. By comparing the house prices between different postcodes, you already get an understanding of the desirability of an area even without having visited it. Wealthy expats have traditionally favoured central London areas, such as Marylebone, Mayfair, Knightsbridge, Kensington and Chelsea. However, little further away, Acton in the west, Muswell Hill in the north, Walthamstow in the east and Bermondsey, Blackheath and Peckham in the south east were amongst the “50 Best Urban Locations” by The Sunday Times newspaper (March 2015).

Council Tax in London

As a property owner or tenant, you need to contact your local council and register for council tax after your move. Council tax covers services like refuse collection, street cleaning, parks, education, social services and libraries. The payable council tax depends on the value of the property and the borough where it locates.

The seller or landlord should tell you how much the council tax is for the property you are considering. Take this into account when you consider your monthly house expenses.

Estate and Relocation Agents

If your employer’s or your own funds allow it, you can use a relocation agent to help you with the house search. Good agents are able to give you advice on all areas of London, but many concentrate mainly on the more prestigious postcodes. Relocation agents are also able to help you with other relocation issues, like the school search and opening utility accounts.

Alternatively, you can register with one or several letting agents or estate agents to help you to find a suitable property to rent. Some big names cover the whole of London, but there are also many smaller ones that specialise in certain areas. The agent can charge you only if you sign a contract to accept a tenancy. Ask how much the agent’s fees are and what his/her services cover. Also check that the agent is a member of a self-regulating trade body.

Regardless of the use of an agent, do some research on your own on the Internet. There are good websites where you can define the area, property type, price and number of bedrooms you are looking for. With google street view you can see what the area looks like. These results give you a good idea what to expect, even before you arrive in London.

Renting Property in London

You are most probably looking for rental property when you first come to London. Even if you are relocating here permanently, and prefer to purchase, it is a good idea to live in rented accommodation first. This will allow you to get to know London better and make a more informed choice off the area you would like to live in.

Rental properties come furnished or unfurnished and their prices are stated as pcm (=per calendar month) or pw (=per week). Multiply the weekly price by 4.33 to get a comparable monthly cost. Do expect to pay also the council tax, utility bills and possible service charges.

As a tenant, it is your responsibility not to cause any damage to the property beyond normal wear and tear. Equally, the landlord is responsible to keep the property in a reasonable state of repair and see that the gas and electrical equipment are correctly installed and maintained.

You will also need the landlord’s permission to move a pet in with you. You can read more about moving with pets at the Move section of Family to London.

Deposits and Fees

When you find a place that you want to rent you are asked to pay a holding deposit. Paying this will take the property off the market for the time that it takes to finalize and sign the contract. Do check whether it is refundable in case the tenancy falls through.

The letting agent can also ask you to pay an administration fee. This is to cover the agent’s costs and time for carrying out relevant searches on your background, like credit check and details of your employment.

After signing the tenancy agreement you are asked to pay a security deposit, usually one or two months’ rent. The earlier paid holding deposit should either be returned or deducted from this amount. When your tenancy is over the security deposit is returned to you, unless you have damaged the property. During your tenancy the deposit is protected by the Tenancy Deposit Protection (TDP).

The Inventory

Just before moving in, do a full inventory of the property. Your landlord or letting agent might have already done it, but you should still check it in detail with them. Mark down any faults and wear and tear so that they cannot be blamed on you. If necessary, take photographic evidence.

Tenancy Agreement

Insist on a written tenancy agreement. Ask for a fixed-term tenancy if you want to guarantee that you can live in the property during your planned stay in London. Negotiate a clause that will allow you to end the tenancy earlier, in case your stay in London is cut short. Another option is a periodic tenancy that runs on a week-by-week or month-by-month basis.

Buying Property in London

The process of buying property in the UK might differ greatly from what you are accustomed to. Do find the time to understand the local system.

Freeholds and Leaseholds

UK properties can be sold as freeholds or leaseholds. When you buy a freehold, you become the owner of the property and the land it’s on. Leasehold means that you own the property for up to a certain time, but you do not own the land. Leases can be granted for hundreds of years but check how much of it is left before you decide to buy. It is difficult to find a buyer for a leasehold that has less than 70 years of lease time left. Leaseholds are usually, but not necessarily, flats.

Making an Offer

After you have set your heart on a property, it is time to make an offer. Normally the opening offer is 5-10% below the asking price. To determine a reasonable price check the asking prices of similar properties in the neighbourhood, and better yet, check at what value similar properties have changed hands recently.

When the offer is accepted ask the property to be taken off the market. This means that the property is not being advertised. However, making an offer or accepting it, is not binding. Either party can still walk out of the deal. It is unfortunately not uncommon that gazumping or gazundering might happen. In gazumping the seller decides to ask for more money; in gazundering the buyer insists on lowering the price.

Conveyancing Solicitor

Find a conveyancing solicitor as soon as you start the house hunt. It is yours and the seller’s solicitors who do all the necessary paperwork, draw up the contract and see that it is signed. Your solicitor’s responsibility is also to carry out certain searches (like to check all the ownership details and make sure the property is not subject to any planning actions), see that taxes are being paid, collect and transfer the purchase price and finally register the new ownership with the Land registry.

You are responsible to pay your solicitor’s fees and expenses even if the purchase for one reason or another doesn’t go forward.

Survey

When you are paying a lot of money for a property, it is smart to have a survey done on its condition. If it turns out that there is something wrong, you can either negotiate a lower price or walk away from the deal. Depending on how detailed a report you would like to have, choose between a Condition Report, a Homebuyer Report and a Building Survey.

If you are taking out a mortgage, your lender carries out a valuation of the property. It tells the lender whether the property is suitable for the size of mortgage that has been applied for. The buyer needs also to pay for this expense. However, the valuation report doesn’t tell anything about the actual condition of the property.

Exchanging Contracts

Once you and your solicitor are happy with the contract and the search results, it is time to exchange contracts. At this point, the buyer pays a deposit, which is normally 10% of the purchase price. Exchanging contracts legally binds both the buyer and the seller to follow through with the transaction.

Completion

On the day of the completion the buyer pays the rest of the purchase money, receives the keys to the property and can finally move in.

Costs of Buying Property

In addition to the actual purchase price you need to cover the following costs:

  • Stamp Duty
  • Mortgage fees
  • Solicitor’s fees (including search and land registry fees)
  • Survey fees