London Mortgages

London Mortgages

If you are looking to invest in property in London, whether it be residential, buy to let or commercial, this informative page about London mortgages should be useful to you.

Property Investing in London

Over the years, London has remained an extremely popular city to invest in attracting investors from all over the world. It is amongst the most desirable locations in the UK home to the most expensive properties.

London has been a hub for businesses such as pubs shops and restaurants for centuries. It is a great place to live with people ranging from first time buyers buying their first one-bedroom home to some of the country’s most successful people living in London’s most expensive residences.

It has become harder over the years to afford properties in London as they have continued to rise. Most people buying a property in London will require a mortgage to complete the transaction. There will of course be some in a position that do not need to borrow, however the majority of the market take mortgages in London.

The mortgage that you need will depend on the type of property that you are buying and the use of it. For example, if the property in London is to be your first home or you are moving to another and planning to reside in it, you will require a residential mortgage.

If the property that you are buying in London is to be let to tenants on completion with you planning to reside elsewhere, you will require a buy to let mortgage.

If you plan to buy a commercial property such as a shop or a pub running a business from this location, either yourself running it or another individual or company, you will require a commercial mortgage.


An expert mortgage adviser on the phone speaking to a customer

Is London a suitable location for first time buyers needing mortgages?

London is known to be a fantastic location for first time buyers however many will not be able to afford living there due to high property prices and will find themselves needing to buy properties that are outside of London to be able to meet their budget.

For the first time buyers that can afford to buy in London, over the long term, the city is still seen as a suitable place to invest as there is high demand for properties in London selling to both UK based citizens and foreign investors located all over the world.

For people working in London, most would like to be located close by to avoid the long commute. The transport links in London are excellent making an easy city to cross.

For first time buyers taking mortgages for their property in London, it can be reassuring to know that some lenders make exceptions on properties in London that they would not make in other places in the UK.

For example, there are lenders that will consider high rise blocks of flats (e.g. more than 10 floors) within the parameters of the M25 that they would not consider outside of this radius. They may also make other exceptions such as flats above commercial premises and flats with deck access.

The reason they do this is because they believe there is more demand for properties in London than other places in the UK and they would have a higher chance of selling the property quickly if they ever needed to repossess it.

If you’re thinking of buying in London and want to know how to kill time, click here for some great ideas of things to do in London.

Is London a good spot for buy to let investors needing mortgages?

London is still an extremely popular spot for buy to let investors. Millions of people live in the city meaning there is a lot of choice of tenants when your buy to let property comes up for renewal. Even for the expensive properties in London, there is still a large market for tenants.

This is because, even some of the higher net worth tenants earning substantial incomes still cannot justify buying their own property in London as they prefer the flexibility of renting.

London attracts a lot of professionals so many London buy to let investors choose to buy properties that they let on room-by-room basis (Houses of multiple occupation, also known as HMO) to generate a larger rent from what they would if the property was let on one contract.

London terraced houses

I plan to invest in an HMO in London, Would I need special types of mortgages to do this?

If you plan to buy an HMO in London, it is likely that you will need and HMO mortgage. The lender will need to know how you plan to let the property, for example is it a room-by-room agreement, the amount of money the property will generate and the type of tenants that you expect to be living there.

There may be standard buy to let lenders that are willing to accept the property on a standard buy to let mortgage if all the tenants were under one tenancy agreement.

HMO and buy to let lending are considered complex mortgages so always best to talk to a mortgage adviser with experience in this area who can tell you your options.

When deciding on the type of buy to let property that you plan to buy and whether you intend to buy it in your personal name or through a limited company, it is always best to take tax advice from a qualified tax adviser or accountant. For more details on tax listen to tax man or HMRC are useful.

Is London a good place to invest in commercial property that require commercial mortgages?

London is home to thousands of businesses so still seen as a wonderful place to buy commercial property. Commercial property in London is not cheap but it may generate good income for you to live on.

Rents in London are higher than other places in the UK, but this will also be reflected in the purchase price of the property.

If you plan to run your business from the commercial property that you buy, London is still seen as a great place to operate from with millions of people living there and transport making it very access for clients or customers to come and see you.

If you are taking a commercial mortgage for your commercial property in London, you will find that mortgage rates are generally higher than that of residential mortgages.

This is because the lenders consider the properties to be higher risk than residential properties in London as they are generally harder to fill with tenants than standard homes and harder to sell if a lender needs to take possession of the commercial property in London.

Happy mortgage broker giving free mortgage advice over the phone


Is London a good place for getting bridging finance?

Some bridging lenders see London as a place where they can be more flexible on properties than in some other parts of the UK.

They know that the market is usually buoyant in London so usually have a large appetite for properties based there. If you need a bridging loan, you will usually have options when it comes to raising money for a property based in London.

Bridging loans tend to be significantly more expensive than standard mortgages. This is because they are designed to be paid back quickly, for example within one year, and often used against properties that would not be able to be used as security for standard mortgage.

It is always important to take a professional advice when arranging a bridging loan. If you would like I NEED ADVICE to arrange for a bridging broker to call you to discuss your options, please complete the contact form.

Taking a mortgage to exit the bridging finance

If you need a mortgage to exit out of the bridging finance secured against your property in London, depending on your individual status as a borrower, lenders will usually be happy to arrange a standard mortgage against the property to replace the bridging finance if all is in good order. A mortgage adviser will be able to discuss your options.

High Valued Property

Where are good locations for investing in property in London?

When it comes to looking for the best places to invest in London, this is very subjective as it will depend on what the person is looking for and their use of the property.

For example, people wishing to buy their first property in London looking to live in it may pick an area based on what amenities are around them and the commute to work. This also may be budget based where buyers may not be able to afford the location in London that they would most like to live in. For instance, Mayfair would be out of range for many buyers.

For buy to let investors, the yield that they get on the property and the type of tenants in the area maybe the ultimate objective. Many buy to let investors like Canary Wharf as an area for their buy to let properties as it is home to a lot of city professionals and the property can attractive a strong rental income.

There are many great locations for property investing around London and different people will have a different opinion on which area may consider to be the best for investing in. Three popular areas Kensington, Hampstead, and Battersea. Here is some information about each area.


Kensington is a district in the Royal Borough of Kensington and Chelsea, in the west of London. Its commercial heart is Kensington High Street, and it is one of the most affluent areas in the capital. The area is known for its museums and cultural attractions, as well as its high-end shopping. Notable landmarks include Kensington Palace, the Royal Albert Hall and Hyde Park.


Hampstead is an affluent area of North London, located around 5 miles northwest of Charing Cross. It is known for its picturesque scenery, Hampstead Heath, a large parkland, and its association with many notable people.

It is known for its intellectual, liberal, artistic, musical, and literary associations and for Hampstead Heath, a large, open park.


Battersea is a district in south-west London, England, within the London Borough of Wandsworth. It is located on the south bank of the river Thames, 2.9 miles south-west of Charing Cross.

Battersea was a rural village until the early 19th century when the Industrial Revolution and urbanisation caused a rapid increase in population and the area became a prosperous town with a number of large industries.

The area has a number of attractions including Battersea Park, the Battersea Arts Centre, the Battersea Dogs & Cats Home and the Chelsea and Fulham Football Club ground at Stamford Bridge.

Do I need a London mortgage adviser?

When taking advice about a mortgage in London, you don’t need your mortgage adviser to be based in London themselves as they will not need to visit the property.

They can be based anywhere in the UK as many mortgage advisers can do business by e-mail or telephone which a lot of applicants find convenient as it can help fit in with their work commitments.

If you would like I NEED ADVICE to arrange for a qualified, experienced mortgage to call you to discuss your mortgage options for your property in London, please complete the contact form.


Mortgage advisor giving mortgage advice

Where to find a property for sale?

There are many places that you can look when searching for your property in London. The most traditional way is to visit a variety of estate agents to register with them so they can keep you updated with suitable properties that come on the market in London.

The more modern way of searching for properties in London is using websites such as Rightmove, Zoopla or On The Market.

They allow you to see the properties that the agents are selling so you don’t have to wait to hear from each individual estate agent to search for a property.

Through these websites you can access thousands of properties so you can then arrange viewings with the estate agents when you see one that you like.

If you are serious about making an offer on one of the properties, it’s best to get professional advice from a mortgage adviser first to make sure that you’re in a position to offer.


When looking for a property to buy in London, some purchasers do this via a property auction. In some cases, this may allow you to get the property at a cheaper price, but it does come with some risks.

If buying through a property auction, you need to make sure you are very aware of the condition of the property before you commit to buy it.

You also need to be certain that you’ve got access to the finance needed to complete the property purchase within the contracted amount of time that you need to do it by, this is usually around 4 weeks with exchange of contracts taking place on the day of the auction.

A large property auction company that sells properties in London is Allsop.

Terraced Houses with mortgages

If I buy a property in London through an auction, what type of finance would I need?

Due to the quick time that you need to complete on your London property bought at an auction, taking a conventional mortgage is very high risk as if there are delays for any reason and you cannot meet the purchase date, you will be in breach of your contract losing your deposit and possibly liable for further costs.

As a result, if you plan to buy a London property at auction that has a short set amount of time that you must complete by, it’s best to talk to an adviser that is experienced in auction purchases. The finance taken for auction purchases is usually a bridging loan that is then repaid in the future either by sale of the property or a remortgage on to a standard product if the property is in the correct condition to do so.

Taking bridging loans to purchase your auction property in London is high risk so please do take professional advice.

What are the challenges when taking mortgages in London?

When taking a mortgage for a property in London, there can be challenges like there can be for any other part of the UK.

One of the challenges that may be more relevant to London is for high property prices compared with cheaper places in the UK for example Yorkshire.

This would mean that first time buyers maybe a lot less likely to get the mortgages that they needed to buy their property in London than what they may get in another location due to their income. Saving up for a deposit for a property in London may also be a lot harder due to the higher property prices. This in turn force them out of London when they come to buy their first home.

Like in other parts of the UK, the property itself may make it hard to get mortgages on it due to the construction or perhaps the estate that it is located on. For example, if the property was a high-rise ex-council block of flats with deck access, this would be unacceptable to some lenders.

London based borrowers may face the same challenges that other people in the UK would when it comes to income, their personal commitments and their credit files.


An expert mortgage adviser on the phone speaking to a customer


As we have established, London has been brilliant place for property investing with demand from investors all over the world. Millions of people flock to the city every year and there is always something exciting going on.

As a result, people love to call London home. This in turn has made the London property market very strong over the years. It is unlikely that London will ever be an unpopular place to live so over the long term, London should remain a great place to have your money invested.

Whether looking to take a residential mortgage, a buy to let mortgage, a commercial mortgage or a bridging loan in London, you should always take professional advice.

If you would like I NEED ADVICE to arrange for a professional mortgage adviser to tell you your mortgage options, please complete the contact form.

The information on this page is not tailored to any individual readers and should not be considered financial advice under any circumstances.

If you are seeking advice about a mortgage, you should consult a qualified professional.

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Please note, this is a guide to how much you’d pay on a repayment mortgage, assuming your interest rate stays the same.

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