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Buying a house in London: how buyers can afford to trade up the property ladder without leaving the capital

·5-min read
<p>Luba Gadjourov and her husband, James Reardon managed to trade in their flat in Stratford for a house in Walthamstow</p> (Matt Writtle)

Luba Gadjourov and her husband, James Reardon managed to trade in their flat in Stratford for a house in Walthamstow

(Matt Writtle)

The cost of upgrading from a flat to a house in London has doubled in the past decade, according to research published today.

This year, 83 per cent of buyers selling a flat in London were intending to upsize to a house, gaining a bedroom on the way. But in order to make the move they have had to find an extra £309,000, estate agent Hamptons found.

Back in 2017, the number of flat sellers looking to buy a house was far lower (57 per cent) and they had to spend an extra £140,000 to do so.

For buyers who have also outgrown their starter flat but who can’t afford to take on a much bigger mortgage, there are ways to upsize without a major additional investment.

Research by Hamptons for Homes & Property shows the average value of a two-bedroom flat and a three-bedroom terrace in every borough — an essential guide showing exactly where you can afford to trade up.

Where to upsize from a house to a flat in London

If you are fortunate enough to be in Kensington and Chelsea, where the average flat is worth almost £1.2 million, for example, you can upsize to a house in 28 of London’s 32 boroughs.

But back in the real world, if you are selling a flat in Hackney, where the average price stands at £521,500, you’d need to almost double your mortgage if you wanted a local house at an average price of close to £1 million.

However, you could more easily upsize to 13 other London boroughs, including Lewisham (average price: £545,000) or Greenwich (average price: £460,000).

In Ealing the average price of a two-bedroom flat is £418,000. This would buy you a terraced house in four other boroughs, although you will have to move to the deepest suburbs: Bexley, Barking and Dagenham, Croydon, and Havering are all within your reach.

You would also not need to increase your mortgage much to look at Enfield (average price: £441,000), or Newham (average price: £447,000).

Jeremy Leaf, principal of Jeremy Leaf & Co estate agents, said that in north London houses are by far the hottest property ticket. “They sell much faster than flats,” he said. “There is a market for flats but if they don’t have outside space or are not close to a park, then it is much more difficult to sell.”

Many of his buyers are shifting along the Northern line in search of a house — they often come from Islington, Kentish Town or Tufnell Park. “They know they can get more bang for their buck in Finchley, Barnet, or Whetstone,” he said.

The move isn’t without its financial challenges, however. Most of Leaf’s buyers are selling at the £450,000 to £500,000 mark and buying at around £700,000.

Some have built up savings, others are relying on pay rises since they bought their starter home, while many are having to turn to family for support. “They are invariably getting help from mum and dad, or grandma and grandpa, funded by previous property booms,” he added.

Lee O’Neill, head of sales for Knight Frank in Canary Wharf, Wapping & Aldgate, is seeing the same trend from the other side. “We are seeing people jump a move and selling a one-bedroom flat for £450,000, and then as opposed to buying two bedrooms, they are moving two or three postcodes out. It is a bit of a migration because I think that the last 12 months has just made people think more long term about their homes.”

Most of these buyers are in their late 20s and early 30s and work in the City or Canary Wharf but are moving to Greenwich or Blackheath, or further out into south-east London.

“Historically they worked very long hours and wanted to be close to work. It will be interesting in 12 months’ time when everyone is back in the office a lot more how the commuting will work out for them, but we will have to wait and see,” he said.

Making the move from Stratford to Walthamstow

Luba Gadjourov and her husband, James Reardon, both 31, bought their first home in 2018 — a one-bedroom flat in Stratford, which they painstakingly renovated themselves. However, by 2019 they were feeling the pinch of their lack of space.

“The other issue was the lease, which was getting shorter,” said Gadjourov, who works in marketing for a bank. “We had a choice: either renew the lease, and we were being quoted £30,000 to do it, or move, and we decided to move.”

Making the move took some careful planning. “We made a really conscious effort to get better jobs, which meant that we were able to save on top of paying our mortgage,” she said. “And it meant that when we were looking for a mortgage, we could borrow more. By renovating our flat, which we did ourselves, we made a profit of about £20,000.”

Their hard work paid off and in November they were able to buy a three-bedroom semi-detached house in Walthamstow, an area they both liked and could afford. They were able to sell their flat for £351,000, while their house cost £650,000.

“It was a big jump,” said Gadjourov. “We didn’t have any help with the deposit, so the stamp duty holiday also really helped us.” The timing of their move has proved fortuitous because the couple are expecting their first child, a boy, this autumn. “It has all worked out so well,” she said.

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