To nest or invest is the crucial decision buyers must make

FOR most, buying a property is likely to be the most expensive purchase that they will ever make. As such, one of the key decisions that buyers face is where to buy their property.

The average price of a London property currently stands at £302,000, according to Nationwide. But the performance of house prices have seen plenty of ups and downs since the financial crisis. House prices in Haringey have increased by over 20 per cent in the last year, while prices in Bromley have only gone up by 1.8 per cent.

Buyers need to be clear about what is important to them before choosing a location to move to otherwise they may end up overpaying for their next property.

Even before buyers have set their hearts on an area that they fancy, they should have a good idea about what they can afford. A mortgage is a long-term financial commitment and, after the events of the last few years, buyers should avoid overextending themselves.

In addition, there are many one-off costs of moving – stamp duty, removal companies, mortgage broker fees, legal conveyance, etc – and buyers should be aware of what these are. A clear idea about the costs involved will help them to gauge the areas that fall within their budget.

The internet is a rich source of information to find out about house price performance, crime statistics, school league tables and public transport links. However, there is no substitute for doing your own legwork. “Make a nuisance of yourself,” says Jeremy Leaf, a London-based chartered surveyor. “Talk to neighbours, shop keepers and go and have a nose around the area. Understand the people who live and work there – both day and night – to see if the lifestyle is suitable.”

Buyers should also be careful about being overly influenced by the latest headlines. News stories often have a national focus, and seem preoccupied with short-term data trends, like month-on-month price fluctuations. This can distort the bigger picture. For example, according to Rightmove’s latest house price index, average prices in Merton have decreased by 5.3 per cent in the last month, but annually they have still shown a rise of 8.6 per cent.

Property is a long-term investment and, particularly in London, there are both hot and cold spots, with desirable and undesirable areas within each borough. Leaf says: “The market varies on a street-by-street basis in some areas. Prices could be markedly different based on proximity to schools or, in London, on the boundaries of Underground zones. So it is important that the area is suitable to the needs of the buyer.”

Those looking to invest are usually first-time buyers or second steppers, who are buying their home as a foundation to trade up in the future. Typically, they are looking to stay in a property for a few years, until its value has increased sufficiently and their equity has grown, therfore allowing them to move to larger properties. Buyers who seek a nest will probably be looking to settle down: retirees, or those looking to start a family. The nesting crowd tend to stay in an area for much longer periods of time.

If you are thinking about buying, it is important to be clear about your objectives: how many bedrooms do you need? Do you need parking? Do you want a garden? Do you need to be near a school, or a railway station? Leaf says that lifestyle is key when looking for an area to move to: “Regardless of whether they are nesting or investing, buy around accessible areas for their work, families, leisure pursuits. All areas aren’t as appropriate as each other.”

Nigel Churaman of Your Move suggests Egham (average price £358,000) and Shepperton (average price £356,000) as good areas to nest: “For those who are looking for a family home, or perhaps a place to retire, attractive properties can be found backing on to the Thames or in leafy suburbs with established schools and good local facilities nearby. In addition, Windsor is only five miles away and there is easy access to the M25 and Heathrow airport.”

Churaman is keen on Stratford (average price £246,000) and Manor Park (average price £240,000) as places to invest. “There are a lot of properties on offer in these areas, from new apartments to mid-terraces and larger Victorian properties, so buyers have plenty of options.”

Stephen Ludlow of Ludlow Thompson likes Dulwich (average price £468,000) and Tulse Hill (average price £414,000) as nests: “These areas are priced more competitively than areas such as ‘Nappy Valley’ in Wandsworth. There are plenty of excellent transport links to the West End and the City, and improvements to the overland train routes.” These areas have also seen the opening of lots of new retail outlets recently, which is a strong sign of nesting communities and young families.

Ludlow thinks that Shepherds Bush (average price £492,000) and Wembley (average price £291,000) look like promising areas to invest: “These areas have benefited from recent capital investment. Areas near university campuses or big local employers (like hospitals), such as Mile End or Camberwell, are also attractive. They also benefit from good transport links.”