Shifts in the UK property market have been a mix of positive and negative growth for different types of buyers. But despite the many changes over the past decade, the fact still remains—property purchase in London and its surrounding boroughs is one of the most globally stable investments.
There are 5 general types of property buyers in the UK. Their budgets and objectives change as they move from one phase to the next.
This demographic are between the ages of 25 to 30 who often prefer to reside in areas where nightlife and access to commercial areas is easy. First-time buyers in the UK will rarely have enough money to spend for a flat in London often looking at boroughs like Kingston
One and two bedroom flats are popular among first-time buyers and they would spend an average of £100,400 for a deposit often requiring help from the Bank of Mum & Dad to complete the purchase. According to Savills, the first-time investor’s budget starts at £300,000. Help to Buy programs and shared ownership are also common means for this type of buyer.
SECOND HOME BUYERS
Young, small families seeking to upgrade for a bigger space for a growing household will need to look for a bigger property or a less urbanized area. Buyers during this phase will choose areas with accessible commuter zones such as Merton, Hammersmith
, or Deptford
. “Second-steppers” are not as ready to invest in London just yet but they will look for homes which may eventually be converted to buy-to-let.
This type of buyer has to have saved a budget between £500,000 to £1m. They usually sell their first property for the purchase of a bigger home.
Despite changes in stamp duty and mortgage regulation property investors who are usually from abroad choose university towns such as Kingston
, or Edinburgh. Property investors from Asia, Russia, and the Middle East have flocked the UK over the past years despite Brexit because of the low value of Sterling. Budgets tend to be between £200,000 and £750,000 for this type of buyer with a preference for 2 bedroom flats or detached homes.
They will also seek to buy properties in Greater London for higher yield and long-term increase in value of their property.
THE OUTLOOK ON LONDON
Experts believe that slower price growth is partly a natural leveling of the market after a decade of double-digit growth that saw property prices rise substantially than inflation and earnings.
The average price of a London houses are still more than double the national average at £484,000 which places the city as one of the top global cities with the most expensive cost of living next to Japan, New York, and Paris.
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