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What can a first-time buyer in the South East buy for less than £250,000?

First-time buyers properties for less than £250,000

Most first-time buyers are celebrating the removal in the Budget of the 1% stamp duty tax on their first house purchase costing up to £250,000. The stamp duty has been scrapped for two years.

According to the Council of Mortgage Lenders, 92% of first-time buyers buy properties costing less than £250,000, and these first-time buyers will save up to £2,500 when they purchase their home.

In London and the South East, however, first-time buyers are making stuffed straw versions of Alistair Darling and setting them alight with flaming torches fashioned from estate agents’ listings.

The reason is that in the South East, away from the Labour heartlands, £250,000 buys you… not half as much as in Macclesfield.

Properties in or near London costing less than £250,000

So what can first-time buyers working in London shoot for? A Wendy house? A false passport and plane ticket to Australia?

I poured myself a stiff drink and fired up FindAProperty to see.

Along the way I found some truly dire dwellings, such as:

  • The crack house with a tenant/customer still in place.
  • The flat where the owner is currently ‘negotiating access’.
  • The house whose neighbour has not one but two mattresses in the garden.
  • The ‘flexible accommodation’ in central London that consisted of a 12-foot room, and a side closet with a loo in it. (It was flexible in that you needed to be a contortionist…)

But why depress would-be first-time buyers in London even more than they’re already depressed? Especially as I am one. (Long story…)

Here instead are a few decent looking homes around London suitable for stamp duty dodging first-time buyers.

A one-bed flat in Shepherds Bush, West London

This well-presented one bedroom flat in a decent period building costs £249,950, and is situated on Askew Road – a fairly busy thoroughfare with grimy bits, on the fringes of Acton but essentially in ever almost-trendy Shepherd’s Bush. (According to the listing, Askew Road is ‘pleasant and vibey’. I stand corrected). You get 448 sq feet for your quarter million quid – the two main rooms are a reasonable size, but the kitchen is an alcove. Never mind, the new Westfield Shopping Centre down the road is full of fancy eateries. Or, says the listing, there’s Ravenscourt Park for the more ‘pastoraly inclined’. (Does that mean a member of the church?)

A two-bedroom flat in Deptford

Head south of the river to up-and-coming and only mildly dangerous Deptford and you too can live the life of a pixel-perfect 3D model from those computerised images that housebuilders create to advertise their developments. Down Deptford way you get a two-bedroom flat for your £249,950, albeit it a purple one. Never mind, it makes it easier for the locals to spot you and mug you welcome you to the area. In case you were wondering, the flat is ‘nestled between the vibrant regeneration of Deptford and the cosmopolitan lifestyle of New Cross’ – which basically translates as ‘halfway between a knocked-down council estate and a kebab shop’. But seriously, cool people do tell me Deptford is the place right now. I’d rather sleep higher than the ground floor though, whatever they say.

A two-bed house in Uxbridge

Move out to Uxbridge (that’s in Zone 6, Londoners) and this little house can be your very own castle. I’m not certain what the snag is here, except for the minor matter of Uxbridge being somewhere that would make you think twice about wasting your bombs on Slough. I love the way the agent talks about how this little terraced house is ‘set in leafy grounds’, as if you’ll have to drive down a long gravel road to your front door in a coach, with Mr Darcy trying to cop a feel of your knee. Cynicism aside, this does appear to be a reasonable starter home, though you probably didn’t expect to pay £250,000 to live in what looks suspiciously like sheltered accommodation when you left your provincial village with a pocket full of beans, big ideas, and a condom.

3-bed house in Romford

Novelists, bankers, and tramps aside, anyone not born in London eventually decamps to the dormitory towns to raise their own children who can one day be amazed at the cost of living in London for themselves. Cut out a decade and move to Romford, where you can bring up your kids as authentic Essex guys and gals, and get a great deal on chrome hubcaps. The step up in size to this 3-bed house is pretty remarkable considering Romford is as close to central London by train as Uxbridge is by tube. I don’t know much about Romford except that it has an excellent tropical fish shop – I was once mugged on a train in Stratford on my way there – but we’re assured this house is in a ‘popular turning’. Turning into what, guffaw, guffaw. Also, I don’t like the agent’s call for an ‘internal inspection’. It makes it sound like the house has worms.

A cottage in Wendover

Wendover is a pretty, happy village in Buckinghamshire that will soon be swallowed up by the less pleasant Aylesbury to the North. It’s on a cracking little train line out of Marylebone, and has all the essentials a village needs – pub, French restaurant, chocolate shop, and Citybloke’s wife’s profit-shirking art gallery. First-time buyers discovered it years ago, so don’t expect bargains. This former farm cottage has two beds and two little reception rooms. Costing £249,950, I think it looks quite sweet. And bigger through binoculars.

A two-bed flat in Brighton

Ah, Brighton – I remember when it was all pensioners and junkies as far as the eye could see. Now it’s the same, but with some trendy delis and an awful lot of ex-Londoners trying to recreate Camden and Notting Hill by the sea, and getting about as far as a duck pond in Dollis Hill. I jest, mostly. Brighton is a pleasant if slightly violent seaside city, with a center full of creative and attractive young people, fringed by criminal and tattooed ones (and that’s just the schoolgirls, etc etc). Still, where else in the South East would first-time buyers get to live in a swanky Regency flat within a stone’s throw of the ocean – or indeed, within a stone’s throw of a stone thrower. (I’m only making fun of Brighton dwellers because I’m secretly jealous of their pseudo-San Franciscan lifestyle. And their rock).

Conclusion: First-time buyers can buy for under £250,000

Yes, even in the South East. Much as I’ve been a bit silly in my commentary above, these six properties look reasonable options for first-time buyers – just so long as you don’t insist ‘reasonable’ means ‘worth £250,000 of hard cash in a way your grandparents would have recognised as value for money’.

Finally, I wouldn’t hang about if you’re determined to buy and you want to avoid paying over the odds.

The not-so-unintended consequence of the Chancellor’s generosity towards first-time buyers could be a sharp rise in the price of houses approaching the £250,000 barrier, as all the good cheaper ones get snapped up.

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{ 20 comments… add one }
  • 1 UK Value Investor April 1, 2010, 1:34 pm

    I’d have to disagree with the bit about not hanging around. I still cannot see how the housing market can maintain it’s current level over the next 5 years. Once the next government gets to work putting up tax and cutting public sector jobs and/or pay, and people start to see that property has gone nowhere for years, why would they want to pay over the odds? I’m quite happy renting, even if it’s for years to come.

    Personally I long for the mid 90’s when I bought my ex-council flat (four bedrooms though!) for £42k. Those were the days.
    .-= UK Value Investor on: Goodbye EDP, hello Luminar =-.

  • 2 The Investor April 1, 2010, 4:32 pm

    Hi Value Investor – I’m currently renting, too, and I think the market is on balance over-valued, but I expect wages to keep ticking up in 2010/11 and the UK economy to recover. Also, the South East won’t be hit as hard as the North/provinces will by public sector cutbacks.

    Given the perceived bonus of this £2,500 tax break – significant for many FTBs – I can easily see more first-time buyer style homes getting bid up towards the threshold in short order. Pretty cunning by the Government, really.

    I agree overall prices could stay flat. This won’t do anything for houses costing £250,001 and upwards. (Indeed it could pull those around the £250K mark down a tad).

  • 3 pkora94 April 1, 2010, 5:04 pm

    If the economy improves then inflation is likely to tick upwards which should be good for debt holders if they can fix their mortgages for the next ten years. Does this entice any renters to go out there and buy instead of renting?

  • 4 ermine April 1, 2010, 6:24 pm

    more to the point, where the hell does a FTB get that sort of wedge and why would they want to splurge it on a house. Move out of the Smoke, guys!

    It’s taken me two thirds of a working life to become mortgage free on a house that’s worth a lot less than that. Either the FTB has got to be seriously coining it or they have no wish to have a life for the next 20 years as they pay down that debt.

    Houses just aren’t worth that sort of money. The London market needs to get some market forces. Move, leave the country or become a banker 😉 There’s more to life than renting a house from a mortgage company. There are other places in the world than London and the South East.

  • 5 Bob April 1, 2010, 9:07 pm

    Might be worth the author taking a look at exactly what can be bought in Macclesfield for £250K.

    Cheshire is a bad example to use for “cheap Northern prices”. I live in Cheshire and £250K doesn’t go particularly far here either.

    Fact is – NO first time buyer is blocked by the 2.5K stamp duty. They are all blocked by the high deposits needed for mortgages.

    That can be changed by;

    1) Lower deposits being needed.
    2) Lower house prices.

    I’d prefer to see (2).

  • 6 Faustus April 1, 2010, 11:21 pm

    Agree Ermine – if I had anything close to £250K I certainly wouldn’t waste it on a poky flat. And assuming a 200K mortgage this would mean spending almost £16K a year over 25 years assuming a low average interest rate of 6%. For anyone earning less than £40K it would be tough. And after all that who would want their residence to be box flat in their 50s?

    A quick look suggests that rental prices for similar properties are £7500 pa in W12, £9000 in Deptford, and £10000 in Uxbridge. I can’t imagine that investing the deposit and the saving over 25 years wouldn’t produce far better returns.

  • 7 ermine April 2, 2010, 9:26 pm

    Those rental costs look good Faustus – definitely the way to go. W12 looks cheap – I used to rent in Acton, and I’d far rather live there than Deptford. My recollection of Deptford was that the area was rough as guts, and it’s not on the tube either. And Uxbridge is too far from anywhere, you’re not living in London anymore.

  • 8 OldPro April 2, 2010, 10:43 pm

    Nobody else has said it so I will… bloody funny write up old man.

    More of the same… please.

  • 9 The Investor April 2, 2010, 11:01 pm

    Yes, renting is still far cheaper than buying in London. The place I rent in West London is £1650 a month. It’d cost north of £2600 @5.5% repayment or nearly £2K if interest only.

    Obviously as a renter I don’t have to pay for repairs and upkeep etc, so it’s even cheaper. On the other hand, I also won’t benefit from capital appreciation. (I know, I know, what capital appreciation from here? But check the property boards and forums, people including me have been saying that since at least 2004. It pays to have a bit of humility about the UK housing market, it has confounded a *lot* of people).

    This article wasn’t really about whether buying is a good idea, I’ve written those before elsewhere on this site. It was more just a quick and hopefully funny (thanks OldPro!) look at what was out there as a response to the budget tax break for first-time buyers.

    I do feel these property permabears just want to read one 5000 word article that says the same thing every time.

    Thanks though for the comments as always guys!

  • 10 Angela April 8, 2010, 12:35 pm

    I’m really struck on reading this how out of whack the UK property market is. I now live in Canada (Ontario) in a relatively small sized city (pop. 350,000). Here you can rent a basic apartment for about $725 Canadian (about 375 pounds a month) and a decent apartment for around 500 pounds a month.

    House prices to buy are also a lot lower. Of course salaries are less too – but even so, the proportion of one’s income taken up by housing is so much less than the UK. We moved in 2002 and sold our tiny semi-detached house in Hampshire (which we had bought only 3 years previously) for twice the price we bought it for. Whilst financially it worked for us, it was ridiculous and no way could we have afforded to buy the house at the price we sold it (and we had a comfortable household income).

    There’s a lot I miss about the UK (the countryside, the culture, the more relaxed society – yes, honestly! – most people where I live now work extremely hard and don’t take a fraction of the vacation time I used to take in the UK – working several jobs is common) – BUT I don’t think I could ever move back to the UK simply because of the extremely expensive housing costs. Even when I rented in the UK (before I bought) the rental market was quite poor in terms of quality unless you were prepared to pay a lot of money or share with several others. Now that I’m in my 40’s I wouldn’t want to go back to that. It’s sad really – the UK is a lovely country but the way the housing market is it really screws people financially.

  • 11 The Investor April 8, 2010, 4:05 pm

    Thanks for your insights Angela, it’s always interesting to hear from escapees from the barmy UK property market. You timed your move pretty well I’d say, since you also benefited no doubt from a decent exchange rate then?

    If I was a ‘we’ I’d seriously contemplate moving to Australia or New Zealand – assuming the exchange rate settles down. Even as it is I can imagine moving to Portugal or the Balearics, where at least you get some sun for your money. Unfortunately as a single man I’m addicted to London.

    Orderly queue, ladies! 😉

  • 12 Lee April 9, 2010, 12:24 pm

    As a FTB in the South East, this made quite depressing reading. However, the thing with averages is, they’re never really all that useful! I’ve found some stunning properties in my chosen area for around £100k less than the average that yes, do require some work, but are otherwise perfect.

    Likewise on the rental market, average rent may be around £800 but if you shop around and hold your cards for the right moment, my girlfriend and I found a beauty for £625 in the perfect area last month. We didn’t bite, as neither of us are ready to move just yet, but it was a fun day out having viewings!
    .-= Lee on: Petrol Set to Hit £1.50/litre by Summer =-.

  • 13 The Investor April 9, 2010, 3:23 pm

    Agree it pays to shop around Lee, especially with rental properties. Properties for sale tend to offer fewer bargains, I think (yes, you may get a bargain because you know how to rewire a house (and good for you – I’m jealous! 😉 ) but that’s really just a drawback factored into the price).

    This post wasn’t so much about averages though as the £250K stamp duty free limit for first-time buyers. The UK average FTB price is way less than £250K on a national level, though I’m not sure about the South East.

    Thanks for letting us know about your recent excursions! 🙂

  • 14 Lee April 9, 2010, 4:07 pm

    Oh definitely! We’d struggle .. actually, no, without a huge deposit, it’d be impossible for us to buy a £250k property, and to be honest neither would we want to. On our combined income we could scrape a £180k mortgage.

    But I wouldn’t want to. That’d involve the both of us working our butts off just to pay to live in a house that we wouldn’t be able to spend all that much time in anyway. That’s not what life is about in our book. We’d rather live in a modest property and have both time and money to spare to enjoy actually living.
    .-= Lee on: Petrol Set to Hit £1.50/litre by Summer =-.

  • 15 Nut August 13, 2010, 8:53 pm

    Yes ideally house prices will drop, however in all liklihood they are just going to stagnate and maybe some will drop slightly but this will probably be more a case of owners being willing to lower their asking price to get a faster sale.

    The fact is the only way house prices are going to drop is if house owners demand lower amounts of cash in the first instance.

    What home owner in their right mind is going to be willing to take less than the maximum they can get?

    Yes first time buyers need something to happen and most home owners agree and sympathise, however I somehow doubt when push comes to shove this sympathy would turn into a willingness to accept less than market value for their homes.

    House prices will always be pushed up because they are motivated by greed, greed is inherent with most of us, like it or not these house prices are most likely here to stay.

  • 16 Louise May November 25, 2010, 5:03 pm

    The cost of properties has dropped so significantly its unreal. Prices have been steadier in the south east, including property in London. Prices in Northern Ireland have nearly halved especially in the capital Belfast. the average price which was once £180,000 is now around the £120,000 mark. Alot of people have got stung!

  • 17 saowapang September 20, 2011, 8:02 pm

    if the people have 250,000 why don’t you come to buy my house and business+car you ca have a house,job,car close to the beach in pattaya every thing cheap less than 250,000 pound you will leave here comfortable lief for get to tell you this place it Pattaya Thailand.

  • 18 Chris April 20, 2012, 9:34 pm

    ” In case you were wondering, the flat is ‘nestled between the vibrant regeneration of Deptford and the cosmopolitan lifestyle of New Cross’ – which basically translates as ‘halfway between a knocked-down council estate and a kebab’. ”

    LOL! Absolutely brilliant writing! Tell it like it is…

  • 19 Geography Police June 21, 2015, 8:12 am

    Romford is in London, not Essex.

  • 20 Rosie Slosek September 16, 2016, 12:26 pm

    Time for an update 6 years later?

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