When you first commence your London house hunting quest, it can be a little intimidating to say the least. Estate agents, rental agents, mortgage providers, credit checks, different types of accommodation and unfamiliar terminology can all stack up to make the process seem overwhelming.
But you can do a huge amount of homework and house hunting before you even leave home. With many agents providing excellent videos and pictures of properties, you can view in this manner, and therefore line up suitable properties to view on your arrival in London.
Different types of accommodation
The type of accommodation you’re looking for will depend on a variety of factors. These might include whether you’re a single person, a couple or coming to stay in London as a family. How long you are planning on living in London for, and do you want to buy or rent a property? Would you consider a room in a shared house, or perhaps become a lodger in a private home?
The options are endless, but include the following:
- As a lodger in a private home
- Taking a room in a shared house
- Long term bed and breakfast accommodation
- Renting a flat (apartment) or house
- Purchasing a property
The wording used in UK real estate might be quite different to that of your country. Below are some of the common terms that you’ll be likely to come across:
- Terraced: This is a property that’s in a row of houses, so is attached to the houses on either side of it.
- End of terrace: The end property in a row such as described above. So it’s attached to the property on one side, but not on the other.
- Semi-detached: A house that’s attached to another on one side only.
- Link detached: This is a house that stands detatched from others around it, but is attached at some place, usually by a garage that links to your neighbour’s garage.
- Flat: Apartment in a block
- Maisonette: A house that’s been divided into two separate living accommodations, one occupying the upstairs and the other on the ground floor. Each will have a separate entrance.
- Studio flat: A single room that comprises of a kitchenette, and living/sleeping space. It will usually have a separate (but small) bathroom that likely only contains a shower, toilet and wash basin.
- Two up two down: This is a property that consists of two rooms downstairs and two rooms upstairs.
- Bungalow: A house that’s all on one level, so the living and sleeping accommodation is all on one floor. However, it’s common that some bungalows have been extended up into the roof, so offering more living space. The upstairs rooms will be in the eaves of the house, so are likely to be lacking in headroom in a lot of cases.
Buying versus renting
It’s very common for expats coming to live in London to rent a property, at least at first. You can search for both using some of the excellent property websites available. Two of the best are Right Move and Zoopla.
The property market in the UK took somewhat of a dive in 2008/9, but has gradually been recovering ever since. But in real time this means that houses are still of a lower value than they were a few years ago. However, one of results of the credit crunch means that it’s become far more difficult to get a mortgage. This in turn has resulted in the increase for the demand of rental properties.
Of course, your personal situation will determine whether you wish to rent or buy, but if you’ve never lived in London before, then a wise move would be to rent at first. That way you can ensure that you like the area you’ve chosen, before committing a substantial amount of cash to purchasing a property.
Purchase and rental prices vary dramatically, depending on the area you choose to settle in. London Property Watch gives average prices to rent or buy various different sizes of property in all areas of London.
Location, location, location
Where you live in London will have a huge impact on the amount of money you need to spend on purchasing or renting a property. For instance, properties in the most prestigious addresses, such as central London, Kensington, Chelsea or the Docklands can’t be found for much less than six figures (purchase price). However, if you move to some of the outer areas of London, then property prices become much more affordable.
Wherever you choose to live in London you’ll be well serviced by the excellent public transport system. The underground train system, known as ‘The Tube’ covers the whole of the city. And although it can get crowded during the rush to and from work in morning and evening, in general it’s pleasant, safe and efficient to use.
This means that it’s perfectly feasible to choose to live in the outer reaches of London – even in the open spaces of leafy suburbs such as Richmond, Kew, Blackheath or Harrow – and still be able to commute into central London easily and quickly.
Pros and cons of using an agent
Whether or not you choose to use an agent to aid your search is a personal preference. When it comes to purchasing a property, then registering with an agent is probably the way to go. British culture means that most people selling a property do so through an agent. Fees (for the seller only, the buyer doesn’t pay agent fees) are reasonable, and estate agents work hard to bring as many viewers as possible who’re in a position to buy, as they get paid on a commission only basis.
However, when it comes to renting a property, you can choose to go it alone or use the services of an agent. Rental agents charge their landlords quite high fees, so finding a rental home in this manner is usually a little more expensive. However, you have the guarantee of an office to go through should there be any issues, and that you’re renting from a reputable person.
An agent is likely to charge you a credit check fee when you first take out your lease, but there shouldn’t be any on-going fees for the tenant. These are all covered by the landlord. Agents are responsible for ensuring that all properties on their books conform to health and safety standards, and that you’re provided with accommodation that’s fit for purpose.
But that doesn’t mean that renting from a private landlord is a bad idea. Often it can save you money in the long run, and a good landlord will respect his tenants and be grateful to have a professional person (or family) in his or her property.
Good places to search for private properties to rent are Gumtree, in local newspapers or online.
Rental and lease agreements
As is probably normal in your country, it’s usual to have to pay a deposit when you take out an assured shorthold tenancy on a property. In London, this can be anything between one or two months rent, and it’s now law that the landlord has to place that deposit in one of the government approved tenancy deposit protection schemes. This ensures that your deposit is safe, and that you’ll get it back at the end of your tenancy as long as you meet the terms of your agreement, leave the property undamaged and pay your rent and bills.
Both you and the agent and/or landlord will sign a tenancy agreement that details all the terms and conditions. Most are pretty standard, but if your English isn’t fluent, or you’re not familiar with any of the terminology, then it’s wise to get it checked over by a lawyer before signing.
It’s also highly likely that the agent or landlord will run a credit check on all people who’re going to be living in the property. There’s usually a charge for this, but it should be one off fee.
It’s usual that tenants are responsible for all the on-going utility and bills for the property they rent. However, in some cases, especially if you rent a room in a house, certain bills might be included in the rent. It’s essential to ensure that who is responsible for what is clearly outlined in your rental contract.
If and when the time comes to purchase a property, unless you’re in the lucky position of being able to buy a house outright, then you’ll need to take out a mortgage. Since the credit crunch of 2008/9, lenders have become far stricter as to the criteria needed to lend money. It’s usual to have to put down a 20 to 25 per cent deposit, and only be lent the 75 to 80 per cent of the purchase price.
The amount a UK mortgage provider will lend is directly linked to your salary. According to The Mortgage Store, this is generally around 3.5 times your annual salary, or in the case of a joint mortgage, 2.5 times the joint annual income or 3 times the higher income plus 1 times the lower income.
For those who’re employed you’ll need to provide proof of salary. For those who’re self-employed you’ll usually need to provide three years worth of accounts. However, there are some lenders that will take a single year’s accounts for the self-employed.
In the UK there are two different types of mortgages:
- Repayment mortgages
- Interest only mortgages
A repayment mortgage is the more expensive monthly option. However, your payments are calculated so that every payment covers both the interest and a proportion of the loan. This means that your debt reduces every year until it’s finally paid off in full.
An interest only mortgage means that your monthly payments only cover the interest accrued. So in simple terms, you’re not paying off the actual debt, only the interest. What is needed is a solid investment or financial plan to be able to pay off the mortgage at the end of the loan period.
Because of the amount of people who’ve run into trouble with these interest only mortgages, the Financial Services Authority have determined a new ‘affordability test.’ This comes into force in April 2014, and will ensure that lenders will have to show greater responsibility as to whom they provide with interest only mortgages.
Need more information?
Information on house hunting, mortgage and other can be found at MoneySavingExpert – a great website with lots of information on every aspect of searching for a property. If you want to delve further into life in London, then why not check out our pages on the Cost of Living in London, Things to Do, Shopping, Getting Around and more.