Buying a home in London follows the same legal steps as anywhere in England, but prices, leasehold flats and competition for good homes make each step matter more. This guide walks you through the whole process in order, from working out what you can borrow to picking up the keys.
The process at a glance
- Work out what you can borrow and get a mortgage in principle
- Budget for stamp duty, legal fees and the survey
- Search the right areas and property types
- Check whether it is freehold, leasehold or share of freehold
- View properties and ask the right questions
- Make an offer and negotiate
- Instruct a conveyancing solicitor
- Book a survey
- Searches and enquiries
- Receive your mortgage offer
- Exchange contracts
- Complete and move in
Step 1: Work out how much you can borrow
Start with what a lender will realistically lend you, not with listings. Most lenders cap borrowing at around 4.5 times your annual income, and many offer less once they have looked at your spending and debts (MoneyHelper). You will usually need a deposit of at least 5 to 10% of the price.
Mortgage capacity calculator
How much could you borrow?
Buy-to-let lenders work from the rent. For a home to live in they work from your income. Enter a figure to see the loan, the price and a PDF you can keep.
Mortgage capacity calculator
How much could you borrow?
On a buy-to-let, lenders work from the rent. On a home to live in, they work from your income. See both.
The rent decides how much you can borrow. Find out what your property would let for.
Might you let the property one day? Find out what it would rent for.
Or book a callA guide only. It isn't a mortgage offer or financial advice, and Cozee is a letting agent, not a mortgage broker or lender. Every lender has its own rules and also looks at your credit record, age, spending and other properties, so speak to a mortgage broker before you make an offer. The figures leave out stamp duty, legal and lender fees. Sources: Bank of England rules for buy-to-let lending (SS13/16), GOV.UK stamp duty rates.
How much you can borrow: common questions
How much can I borrow on a buy-to-let mortgage?
Lenders work mainly from the rent, not your salary. The rent usually has to cover 125% of the mortgage interest if you pay basic-rate tax, 145% if you pay higher-rate tax and 125% if you buy through a limited company. The interest is worked out at a test rate that is higher than the rate you pay. Most lenders also lend no more than 75% of the property's value, so you need a deposit of at least 25%.
What is an interest cover ratio (ICR)?
It is the rent as a share of the mortgage interest. With a cover of 145% and a test rate of 7%, a £250,000 loan needs a rent of about £2,115 a month.
Why can I borrow more with a five-year fix?
Bank of England rules ask lenders to test a buy-to-let loan at the rate plus 2 percentage points, and at no less than 5.5%. A rate fixed for five years or more is exempt, so most lenders test it at or near the rate you actually pay. A lower test rate means the same rent supports a bigger loan.
Can I borrow more through a limited company?
Often, if you pay higher-rate tax. A company deducts all its mortgage interest before tax, so lenders usually ask for 125% cover, not 145%. Company mortgage rates and fees are usually higher, though, and moving a property you already own into a company can mean stamp duty and capital gains tax.
How much can I borrow for a home to live in?
Most lenders lend up to about 4.5 times your household income before tax. Some go up to 5.5 times for higher earners, and they lend less if you have loans, credit cards or childcare to pay. They also look at your spending and your credit record.
How much deposit do I need?
For a home to live in, at least 5% of the price, and rates are lower with 10% or more. For a buy-to-let, most lenders ask for at least 25%. Stamp duty and legal fees come on top of the deposit.
A guide only. It isn't a mortgage offer or financial advice, and Cozee is a letting agent, not a mortgage broker or lender. Every lender has its own rules and also looks at your credit record, age, spending and other properties, so speak to a mortgage broker before you make an offer. The figures leave out stamp duty, legal and lender fees.
The calculator gives you an estimate. For a fuller picture, including what a formal report contains and when you need one, see our mortgage capacity report guide. Rates move your budget too, so check the latest on our mortgage rates chart.
Once you know your range, ask a lender or broker for a mortgage in principle (also called an agreement in principle). It is not a guaranteed loan, but most London agents will ask to see one before they put your offer forward.
First-time buyer? A Lifetime ISA can add a 25% government bonus to your deposit savings.
Step 2: Budget for the costs on top of the price
The price is not the whole bill. As a buyer you do not pay the estate agent: the seller does.
| Cost | Who you pay | What to expect |
|---|---|---|
| Deposit | Paid at exchange, via your solicitor | Usually 5 to 25% of the price |
| Stamp Duty Land Tax | HMRC, via your solicitor | 0% up to £125,000, then 2%, 5%, 10% and 12% bands (GOV.UK) |
| Conveyancing | Your solicitor or conveyancer | Fixed fee plus searches and Land Registry fees; get at least three quotes |
| Survey | RICS surveyor | From a few hundred pounds to over £1,000 for a Level 3 (RICS) |
| Mortgage fees | Lender or broker | Arrangement, valuation and broker fees vary by product |
| Moving | Removals, utilities, furniture | See our moving cost guide |
Stamp duty in practice (England, from April 2025):
- A £450,000 flat costs £12,500 in stamp duty, or £7,500 for a first-time buyer.
- First-time buyers pay nothing up to £300,000 and 5% on the part from £300,001 to £500,000. Above £500,000 the relief does not apply at all.
- Buying a second home or a buy-to-let adds a 5% surcharge. Buyers who are not UK resident pay a further 2%.
Work out your exact figure with our stamp duty calculator, or read the first-time buyer stamp duty guide.
Step 3: Search the right areas and property types
With a budget set, narrow down where you can buy. Compare prices street by street with our area guides, and be honest about trade-offs: in much of zone 1 and 2, your budget may buy a flat rather than a house.
- Set up alerts on Rightmove, Zoopla and OnTheMarket, and register with local agents. Good homes often go to buyers the agent already knows.
- Decide your must-haves (bedrooms, outside space, commute) and nice-to-haves before you view.
- Buying a flat? Read our guide to buying a flat in London or maybe our guide to buying a studio flat. Buying to let? Start with buy-to-let and rental yield.
- Considering an auction? The rules are different: see buying at auction.
More detail: how to find a property.
Find your next home with Cozee
Step 4: Freehold, leasehold or share of freehold?
Most London flats are leasehold, so check tenure before you fall for a place. It changes your costs and your rights.
- Freehold: you own the building and the land outright.
- Leasehold: you own the right to live in the property for a set number of years. You usually pay ground rent and service charges to the freeholder. Short leases (under about 80 years) cost more to extend and can be harder to mortgage.
- Share of freehold: you hold a lease, but you and the other flat owners jointly own the freehold, so you control the building and the lease terms.
How to check if a property is freehold or leasehold, and who owns the freehold: the listing must state the tenure. To confirm it, buy the title register from HM Land Registry for £7. The online title summary shows whether it is freehold or leasehold and who owns it. For a leasehold flat, the freehold has its own separate title.
Full comparison: leasehold vs freehold. Using the register: our Land Registry guide.
Step 5: View properties and ask the right questions
Since 2023, agents must show key “material information” in listings, including council tax, tenure, price, utilities, parking and issues such as flood risk or building safety (RICS). Read it before you book.
At the viewing, look for damp, cracks, the age of the boiler and windows, and water pressure. Ask the agent:
- Why is the owner selling, and are they in a chain?
- How long has it been on the market, and have there been offers?
- For flats: how long is the lease, and what are the service charge and ground rent?
- What is included in the sale?
Check the building’s age with our when was my property built guide. Full checklist: what to look for at a viewing.
Step 6: Make an offer and negotiate
Make your offer to the agent by phone, then confirm it in writing. Include your mortgage in principle, your deposit, whether you are chain-free and your ideal timescale. A strong, ready buyer often wins over a slightly higher bid.
- Price it on evidence. Look at recent sold prices for similar homes nearby, not the asking price. Our house valuation tool uses Land Registry sales data.
- When to offer below asking: the home has been listed for a long time, has visible defects, or is priced above comparable homes.
- If the seller counters: accept, meet in the middle, or hold firm. Walking away is always an option.
An accepted offer is not binding in England. Either side can pull out until contracts are exchanged, so move quickly through the next steps.
Free property valuation
How much could your property sell for?
Enter the postcode and answer four quick questions. We'll estimate the sale price from Land Registry sales nearby, and the rent it could earn if you let it instead.
- Land Registry sales data
- Sale price and rent in one report
- Free, in under a minute
Step 7: Instruct a conveyancing solicitor
Once your offer is accepted, the agent sends a memorandum of sale to both sides’ solicitors. This starts the legal work.
Your solicitor or licensed conveyancer:
- checks the title and the contract
- orders searches and raises enquiries with the seller’s solicitor
- reviews the lease, for flats
- reports to your lender and handles the mortgage money
- pays stamp duty and registers you as the owner
Find a regulated firm through the Law Society’s Find a Solicitor directory, and ask for a fixed-fee quote. More: what a property solicitor does, what a conveyancer does and conveyancer vs solicitor.
Step 8: Book a survey
Your lender’s valuation only protects the lender. A RICS survey tells you about the condition of the home (RICS):
| Survey | Best for |
|---|---|
| Level 1 | Newer, conventional homes in good condition |
| Level 2 | Conventional homes in reasonable condition, the usual choice |
| Level 3 | Older, larger, altered or run-down homes, or if you plan major works |
Most Victorian and Edwardian London houses call for a Level 3. If the survey finds problems, you can renegotiate the price or ask the seller to fix them.
Step 9: Searches and enquiries
Your solicitor orders local authority, drainage and water, and environmental searches. For a leasehold flat, they also request a management pack from the freeholder or managing agent (the LPE1 form), covering service charges, major works and building insurance.
They then raise enquiries with the seller’s solicitor about anything unclear. This is usually the longest stage, so answer your solicitor quickly and chase politely.
Step 10: Receive your mortgage offer
Submit your full mortgage application as soon as your offer is accepted. The lender values the property and checks your payslips, bank statements and ID. If the valuation comes in below the agreed price, you may need a bigger deposit or a renegotiation. Once approved, you get a formal mortgage offer, which your solicitor needs before exchange.
Step 11: Exchange contracts
When searches, enquiries and your mortgage are in place, you sign the contract and transfer your deposit to your solicitor. At exchange the solicitors swap signed contracts and agree the completion date. From this point you are legally bound to buy (MoneyHelper). Arrange buildings insurance from exchange.
Step 12: Complete and move in
On completion day your solicitor sends the rest of the money to the seller’s solicitor. Once it arrives, the agent releases the keys. The gap between exchange and completion is typically 7 to 28 days. Your solicitor then pays the stamp duty and registers you at HM Land Registry.
Plan the move with our moving checklist, and set up electricity and gas before you arrive.
Frequently Asked Questions (FAQs)
Often several months from accepted offer to completion. Leasehold flats and long chains take longer. Exchange to completion is typically 7 to 28 days.
Most lenders cap lending at around 4.5 times income, often less after affordability checks. Use our mortgage capacity calculator for an estimate.
If you have a mortgage, your lender will insist on a solicitor or licensed conveyancer. Even for cash buyers, the legal checks protect you from buying a home with title or planning problems.
They check the title, order searches, review the contract and lease, handle the mortgage money, exchange contracts, pay stamp duty and register you as the owner.
Download the freehold title register from HM Land Registry for £7. It names the owner. If you own a leasehold flat, your lease and service charge demands also name the landlord.
Yes. Until exchange, nothing is legally binding in England, so a seller can accept a higher offer (gazumping).
No. The seller pays the estate agent. Buyers pay their own solicitor, survey, mortgage fees and stamp duty.
Last Updated on October 9, 2026