Get all the data you need about the real estate market in London
SUMMARY
What property can you afford in London? Today, £300,000 mainly buys flats in cheaper outer boroughs, £400,000 makes ownership realistic, £500,000 brings genuine choice, £600,000 to £750,000 opens much more of the city, and £1 million buys broadly outside prime central London.
The London average of about £554,000 hides more than it explains. Property type and borough can shift the realistic purchase price by hundreds of thousands of pounds, so two buyers with the same budget can be shopping in completely different markets.
London is cheaper than a year ago, but not dramatically easier to buy. Prices are down while mortgage costs remain high, which means the monthly payment is still doing more damage to affordability than the recent fall in property values is doing to help it.
Flats remain the main entry route. Their average price is more than £200,000 below the average London terrace, and recent weakness in flats has widened that gap further.
Around £400,000 is an important dividing line. In cheaper outer boroughs it can reach a conventional terraced house; farther inward, the same money usually buys a flat.
£500,000 is another unusually important threshold because it is both a practical budget step and a tax boundary. Qualifying first-time buyer relief disappears entirely once the purchase price goes above £500,000.
The deposit is only part of the cash problem. Stamp Duty, conveyancing, surveys, mortgage fees and repairs mean a buyer can need materially more cash than the headline deposit suggests before the purchase is comfortable.
A larger deposit helps twice: it reduces the loan and can improve the mortgage rate. On London-sized mortgages, even a modest rate difference can materially change the monthly bill.
Where money goes furthest is not random. Outer southeast, south and east London give buyers the clearest path to more space, while moving inward often means paying another £100,000 or £200,000 for a similar property type and a shorter commute.
The practical conclusion is simple: London is still buyable below the citywide average, but the version of London you can afford changes sharply with each £100,000 step. Buyers should negotiate hard, keep borrowing below the lender maximum where possible, and judge affordability from the monthly cost and total cash requirement rather than the purchase price alone.
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Why is it so hard to say what you can afford in London?
What you can afford in London currently depends far more on the type of home and the borough than on the headline London house price.
The latest ONS and HM Land Registry data put the average London property at about £554,000. But the gap underneath that figure is huge. Flats and maisonettes average roughly £431,000, while terraced houses are around £641,000, semi-detached homes about £722,000 and detached homes more than £1.1 million.
Location stretches the market even further. Barking and Dagenham averages £371,000, Bexley £405,000 and Greenwich around £465,000. At the other end, Kensington and Chelsea remains above £1.2 million despite a sharp recent fall.
So a buyer with £400,000 can be close to the average price of a house in one part of London while struggling to buy an average flat in another. A single London affordability number is not much use once you get down to an actual search.
| London market | Approximate price | What that price represents | Recent direction |
|---|---|---|---|
| All London homes | £554,000 | Citywide average sale price | -2.5% YoY |
| Flat / maisonette | £431,000 | Main entry point for buyers | Around -5% YoY |
| Terraced house | £641,000 | Typical family-house step | Broadly flat |
| Semi-detached house | £722,000 | Mainly outer-London housing | Slightly higher |
| Detached house | £1.16m | Scarce London stock | Slightly lower |
Is London property actually getting cheaper now?
London property is getting cheaper on paper, and the weakness has lasted long enough to be more than a one-month wobble.
According to the latest ONS housing release, London prices were down 2.5% year on year. More importantly, this was the tenth consecutive month in which London recorded an annual house-price fall. London was also the weakest English region in the latest official comparison.
The weakness is concentrated in places and property types that became especially expensive during the previous cycle. Inner London has driven much of the decline, while flats have generally fallen faster than houses.
A separate reading from Lloyds also recently put Greater London prices about 1.5% lower than a year earlier while several northern UK regions were still rising. Different indices use different samples, but the message is fairly clear: London remains one of the softest parts of the UK housing market.
For buyers, that gives more room to negotiate. It has not produced a dramatic affordability reset because mortgage costs have moved the other way.
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Towers sold off plan to overseas buyers have been reselling below what the first owners paid for a decade now. Where asking prices sit furthest from what flats actually earn and resell for.
How much salary do you need to buy a property in London?
A household earning around £80,000 can realistically enter the London market today, while buying around the middle of the market usually requires something closer to a six-figure household income unless the deposit is large.
A useful starting assumption is roughly 4.5 times household income, although lenders can offer more or less depending on spending, debts, dependants and the mortgage term.
On that basis, £60,000 of household income supports roughly £270,000 of borrowing. £80,000 gives about £360,000, £100,000 about £450,000 and £120,000 about £540,000.
Higher-income multiples can change the picture sharply. Nationwide's Helping Hand mortgage, for example, allows eligible first-time buyers to borrow up to six times income. Nationwide said usage of the scheme increased 53% over a recent 12-month period after it increased the maximum multiple from 5.5 to six.
That does not make six times income a sensible default. It simply shows how far lender policy can stretch the upper limit for certain buyers.
| Household income | Mortgage at 4.5x income | Approx. budget with 10% deposit | What that reaches in London |
|---|---|---|---|
| £50,000 | £225,000 | £250,000 | Cheapest outer-London flats |
| £60,000 | £270,000 | £300,000 | One-bed flats, some two-beds |
| £80,000 | £360,000 | £400,000 | Broad flat choice, a few houses |
| £100,000 | £450,000 | £500,000 | Strong flat budget, outer houses |
| £120,000 | £540,000 | £600,000 | Many London flats and houses |
| £150,000 | £675,000 | £750,000 | Broad family-home market |
| £200,000 | £900,000 | £1m | Houses across much of London |
What can £300,000 buy in London today?
£300,000 can still buy a proper London flat today, but the search quickly becomes difficult once we move away from the cheaper outer boroughs.
The latest ONS borough data make the difference clear. Flats average about £250,000 in Barking and Dagenham and £241,000 in Bexley. Croydon has also remained one of the cheaper large apartment markets in south London.
At those prices, £300,000 can reach ordinary one-bedroom flats and plenty of two-bedroom stock rather than only studios or distressed properties.
Move closer in and the same budget becomes much tighter. Greenwich flats average about £356,000, while Tower Hamlets flats are around £439,000.
So £300,000 still works as a genuine ownership budget inside Greater London. The trade-off is usually distance from central London, property condition, size or transport convenience.
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What can £400,000 buy in London now?
Around £400,000 is currently the point where London buyers can start choosing between an outer-London house and a better-located flat.
The clearest examples come from the southeast and east. Terraced properties average about £404,000 in Barking and Dagenham, £408,000 in Bexley and roughly £400,000 in Croydon.
Those numbers cluster unusually closely. £400,000 is now a realistic entry point for a conventional terraced house in several cheaper London boroughs.
Move toward the centre and the property type changes. Greenwich flats average £356,000, while its terraced homes average £545,000. Tower Hamlets flats are around £439,000 and houses cost considerably more.
A £400,000 buyer therefore faces a very concrete choice: more space farther out or an apartment closer to central London.
| Area | Average flat | Average terraced home | What £400k roughly buys |
|---|---|---|---|
| Barking & Dagenham | £250,000 | £404,000 | Good flat or entry-level house |
| Bexley | £241,000 | £408,000 | Large flat or some terraces |
| Croydon | Around £260,000 | Around £400,000 | Flat comfortably or some houses |
| Sutton | Around £280,000 | Around £460,000 | Strong flat budget |
| Greenwich | £356,000 | £545,000 | Mainly flats |
| Tower Hamlets | £439,000 | £695,000 | Below-average flat budget |
What can £500,000 buy in London?
£500,000 currently buys a wide range of London flats and family houses in several outer boroughs, so this is where the market starts to feel much less restrictive.
Barking and Dagenham, Bexley, Croydon, Newham, Sutton, Greenwich and several other boroughs all have overall averages below or around this level.
For someone prioritising a house, £500,000 already sits comfortably above average terraced prices in Barking and Dagenham, Bexley and Croydon. Sutton also comes into range.
For someone prioritising location, the same money reaches much further into the apartment market. It exceeds the average flat price in Greenwich and Tower Hamlets, although £500,000 remains well below the price of a typical house in much of inner London.
There is also a tax reason to pay close attention to this exact budget. First-time buyer Stamp Duty relief currently applies only when the whole property costs £500,000 or less. A qualifying first-time buyer pays nothing on the first £300,000 and 5% on the next £200,000. Go above £500,000 and the relief disappears.
That cliff can make a £510,000 purchase surprisingly more expensive upfront than a £500,000 one.
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What can £600,000 buy in London today?
A £600,000 London budget now gives buyers real choice across a large part of the capital.
The latest official citywide average is below this level, so a £600,000 buyer is no longer operating near the bottom half of the market.
That amount is enough to buy around or above the average property price in many boroughs across southeast, east, north and west London. It can also comfortably cover average terraced-house prices in several outer areas.
Closer to the centre, £600,000 still tends to mean a flat rather than a house. But the compromise becomes much less severe: buyers can look at larger two-bedroom apartments, better streets or stronger transport locations without being restricted to London's cheapest districts.
Around this budget, the question usually changes from “can we buy in London?” to “how much space are we willing to give up for the location we want?”
What can £750,000 buy in London?
£750,000 currently buys a family house across large parts of London and a strong apartment almost everywhere outside the most expensive prime neighbourhoods.
The average London terrace is around £641,000 and the average semi-detached house sits close to £722,000. A £750,000 budget therefore clears both benchmarks.
That opens up conventional family housing well beyond the cheapest boroughs. It also gives buyers access to higher-priced districts such as Wandsworth, Haringey, Barnet, parts of Hackney and parts of Islington, depending on property type and exact neighbourhood.
There are still big pockets where £750,000 will mainly buy a flat. A Victorian house on a sought-after street near a good school or station can command hundreds of thousands more than the borough average.
But at this level, buyers are usually choosing between several credible versions of London rather than searching desperately for one place they can afford.
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What does £1 million buy in London these days?
£1 million buys a house across most of London these days, although prime central London can absorb that budget surprisingly quickly.
The gap with mainstream London is large. £1 million comfortably exceeds average prices in almost every London borough and sits far above average terraced-house values across much of the capital.
That means detached or semi-detached houses become realistic in many suburban markets, while inner-London buyers can choose from premium flats, maisonettes and a broader range of houses.
Central prime property works on a different scale. Kensington and Chelsea still averages above £1.2 million even after significant price weakness, and individual houses in its most expensive neighbourhoods routinely sell for multiples of £1 million.
So £1 million is a very strong London budget. It simply stops feeling enormous once we enter the small group of neighbourhoods where land scarcity and global wealth set the price.
Where does your money go furthest in London?
For buyers who care about space, money currently goes furthest in outer southeast, south and east London.
Barking and Dagenham offers one of the clearest examples. The average flat is £250,000 and the average terrace £404,000. Bexley is similarly inexpensive at £241,000 for flats and £408,000 for terraces.
Croydon gives buyers another large pool of relatively affordable houses and flats, while Sutton moves slightly higher but remains well below many inner-London boroughs.
East London creates a different trade-off. Prices rise almost step by step as we move inward: Barking and Dagenham is around £371,000 overall, Newham roughly £400,000, Tower Hamlets around the mid-£400,000s and Hackney above £600,000.
That progression lets buyers price the commute pretty directly. Spending another £100,000 or £200,000 can buy a similar property type several stops closer to central London.
South and southeast London generally give more house for the same money. East London often gives the stronger compromise for buyers who care more about fast access to Canary Wharf, the City or the Elizabeth line.
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How much difference does a bigger deposit make in London?
A bigger deposit makes a large difference to London affordability right now because it cuts both the size of the loan and, usually, the mortgage rate.
Moneyfacts currently puts the average two-year fixed mortgage at about 5.65%. At 95% loan-to-value, where the buyer has only a 5% deposit, the average two-year fix is around 6.1%. At 60% LTV it is closer to 5.1%.
That gap looks small when written as a percentage, but London loan sizes make it expensive.
On a £500,000 purchase, a 5% deposit means borrowing £475,000. A 20% deposit reduces the loan to £400,000. The buyer has removed £75,000 of debt before even benefiting from any lower mortgage rate.
There is a catch. Saving the larger deposit while renting in London is brutally difficult. ONS data now put average private rent in London at £2,317 a month, up 3% in a year. Kensington and Chelsea is above £3,600.
For many London buyers, accumulating the deposit is almost as difficult as qualifying for the eventual mortgage.
How much would a London mortgage cost each month now?
Monthly mortgage payments are currently the hardest part of the London affordability equation.
Moneyfacts now puts the average two-year fixed mortgage rate at roughly 5.65%, after rates climbed materially from their levels earlier in the year. The cheapest advertised deals can be lower, but they normally require large deposits and come with specific eligibility conditions and fees.
At an illustrative 5.65% over 25 years with a 10% deposit, a £400,000 home produces a mortgage payment of roughly £2,240 a month. At £500,000, it approaches £2,800. At £600,000, it is around £3,365.
This is why relatively modest falls in London house prices have not suddenly made the city easy to buy in. A £20,000 discount helps, but the interest paid on a £400,000-plus mortgage has a much bigger effect on the monthly household budget.
The fresh rate trend deserves attention too. Average two-year fixes recently moved back above 5.6%, while the cheapest widely available deals were around the mid-4% range for borrowers with much larger deposits. The gap between “best rate” headlines and what a highly leveraged first-time buyer actually pays is large.
| Purchase price | 10% deposit | Mortgage | Approx. monthly payment at 5.65%, 25 years |
|---|---|---|---|
| £300,000 | £30,000 | £270,000 | £1,680 |
| £400,000 | £40,000 | £360,000 | £2,240 |
| £500,000 | £50,000 | £450,000 | £2,800 |
| £600,000 | £60,000 | £540,000 | £3,365 |
| £750,000 | £75,000 | £675,000 | £4,205 |
| £1m | £100,000 | £900,000 | £5,610 |
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Are flats still the easiest way to afford London?
Flats are still the easiest route into London ownership, and the price gap with houses has become unusually wide.
London flats average roughly £431,000, while terraced homes are around £641,000. That leaves a gap of more than £200,000 between the two property types.
Recent price movements have widened that difference because flats have been weaker than houses. Buyers who are flexible on property type can therefore access neighbourhoods that would be completely out of reach if they insisted on a house.
The cheap purchase price can be misleading, though. Service charges of several thousand pounds a year are common in modern London developments, and buildings with concierge desks, gyms, lifts or extensive communal areas can cost considerably more.
Lease length, planned major works and building-safety issues also deserve much more attention than they did during a fast-rising market, because a cheap flat can be difficult to resell if the underlying leasehold costs are poor.
Shared ownership sits at the more aggressive end of the same affordability trade-off. Buying 25% of a £500,000 home means purchasing only £125,000 initially, which dramatically reduces the mortgage requirement. But the buyer then pays rent on the remaining share, usually alongside service charges. It can work for someone whose income is stable but whose borrowing limit is too low for an open-market purchase. Buyers who can afford a conventional flat elsewhere in London should compare the full monthly cost very carefully.
How much cash do you need on top of the London deposit?
London buyers often need thousands or even tens of thousands of pounds beyond the deposit before the purchase is actually affordable.
The biggest extra cost is Stamp Duty. A qualifying first-time buyer purchasing for £400,000 currently pays £5,000. At £500,000, the bill is £10,000.
Above £500,000, first-time buyer relief disappears. Under the standard rates, buyers pay 0% on the first £125,000, 2% between £125,001 and £250,000 and 5% from £250,001 to £925,000.
Someone buying an additional property usually pays another five percentage points on top of those rates. Certain non-UK residents also face a two-percentage-point surcharge.
Then we still have conveyancing, survey costs, mortgage fees, removals and whatever needs repairing after completion.
So £50,000 in savings does not automatically mean a buyer has a usable 10% deposit for a £500,000 London property. At that price, a qualifying first-time buyer already needs £60,000 just for the deposit and Stamp Duty before the other transaction costs arrive.
| Purchase price | 10% deposit | First-time buyer SDLT if eligible | Cash needed before other costs |
|---|---|---|---|
| £300,000 | £30,000 | £0 | £30,000 |
| £350,000 | £35,000 | £2,500 | £37,500 |
| £400,000 | £40,000 | £5,000 | £45,000 |
| £450,000 | £45,000 | £7,500 | £52,500 |
| £500,000 | £50,000 | £10,000 | £60,000 |
| £600,000 | £60,000 | No FTB relief | About £80,000 |
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What each area costs, what it rents for, how long it sits before it sells. Plus the things nobody writes down: what a short lease will cost you to fix, and why an accepted offer here means nothing until exchange.
Should you stretch your budget because London prices are weak?
Stretching to the maximum a lender will offer looks particularly unattractive in London right now.
The buyer has more negotiating power than during a fast-rising market. London has now posted ten consecutive months of annual price declines in the official ONS series, and the recent Lloyds index also shows Greater London falling while parts of northern Britain continue to rise.
At the same time, financing has become more expensive again. Average two-year mortgage rates are back around 5.65%, compared with below 5% earlier in the year.
Those two facts point in the same direction: negotiate harder rather than borrow harder.
Suppose an extra £50,000 of purchase price requires £45,000 of additional borrowing after a 10% deposit. At rates around today's levels, that can add roughly £280 a month over 25 years.
Paying more simply because a bank approves the loan is difficult to justify when the London market itself is giving buyers little reason to rush.
So what property can you afford in London right now?
London is still buyable on a £300,000 to £400,000 budget, but genuine choice starts closer to £500,000 and becomes much broader above £600,000.
Around £300,000, we are mainly looking at flats in cheaper outer boroughs such as Barking and Dagenham, Bexley and Croydon.
Around £400,000, selected terraced houses enter the picture in those same markets, while £400,000 farther inward still usually buys a flat.
At £500,000, the buyer can choose among a meaningful number of outer-London family homes or better-located apartments. £600,000 opens much more of the city. Around £750,000, houses become realistic across a large part of London. £1 million gives broad freedom outside prime central districts.
The difficult part currently is the mortgage rather than finding any property below the London average. Rates above 5% turn very large loans into monthly payments that quickly pass £3,000 or £4,000.
Our clearest conclusion is therefore budget-specific. £300,000 can buy London, but with substantial compromises. £400,000 is enough to make ownership realistic. Around £500,000 is where buyers start having real alternatives. £600,000 to £750,000 buys a genuinely broad London search.
There is no single salary or purchase price that makes London “affordable”. Once we separate flats from houses and outer boroughs from inner ones, the market becomes much easier to understand: your budget tells you which version of London you can afford.
Everything a foreign buyer should know before buying in London
The pack also covers what a short lease will cost you to fix, and why an accepted offer here means nothing until exchange.
OUR METHODOLOGY
This analysis treats “what property can you afford in London?” as a combination of purchase budget, borrowing capacity, deposit size, mortgage cost, property type, location and the additional cash costs of buying. We did not use a single London average as the answer because it hides too much variation between flats, houses and boroughs.
For property prices, we started with the latest official UK House Price Index and ONS housing data, then moved down to property-type and borough level. That let us distinguish the effect of location from the effect of choosing a flat, terrace, semi-detached or detached home, and it also helped identify the budget levels where the realistic set of options changes materially.
The £300,000, £400,000, £500,000, £600,000, £750,000 and £1 million brackets are therefore used as practical search thresholds rather than abstract price bands. We looked at what those budgets reach in areas including Barking and Dagenham, Bexley, Croydon, Greenwich, Sutton, Newham, Tower Hamlets, Hackney and Kensington and Chelsea.
For borrowing capacity, we used 4.5 times household income as the central comparison point because that is an important threshold in the Bank of England and PRA loan-to-income framework. Higher multiples are treated as exceptions rather than the base case. Nationwide's Helping Hand mortgage is included only to show how far some eligible first-time buyers can stretch the upper limit.
Mortgage-payment comparisons use the same assumptions throughout: a 10% deposit, a 25-year repayment term and an illustrative rate of 5.65%. Keeping those inputs fixed makes the monthly-payment table comparable across purchase prices. Moneyfacts mortgage-rate data are also used to show how higher or lower loan-to-value ratios can affect the rate a buyer actually faces.
We separated purchase-price affordability from total affordability. Stamp Duty, first-time buyer relief, the surcharge for additional properties, the non-UK resident surcharge, service charges, leasehold issues and shared ownership costs were considered separately because a lower headline property price can still produce a higher all-in monthly or upfront cost.
Key sources used include HM Land Registry's UK House Price Index, the underlying UK HPI datasets, ONS private-rent and house-price data, the Lloyds House Price Index, Moneyfacts mortgage-rate data, the Bank of England and PRA loan-to-income framework, Nationwide's Helping Hand criteria, and HMRC's residential Stamp Duty rules.
For flats and shared ownership, we also used government guidance on shared ownership rent, shared ownership costs, and the government's leasehold guidance. We prioritized current official or direct sources for rules and market mechanics, then used the freshest market readings available for price direction and mortgage conditions.
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