First-time buyer homes are at their most affordable since December 2007, due to a drop in asking prices and an improvement in the average income-multiple offered by lenders, according to a survey out this week.
But a sobering and staggering statistic is that it takes Londoners, on average wages and without any financial help from friends or family, 19 years to save up for a typical deposit.
The average price paid by a first-timer in the capital is £259,669, meaning buyers need to borrow nearly eight times their salary.
The Council of Mortgage Lenders is calling for the one per cent stamp duty holiday on properties priced below £250,000 to be extended beyond March next year. This would save buyers up to £2,500 in up-front costs, which can make the difference between getting on the ladder and having to stay in the rental sector.
Properties priced less than £250,000 are for sale in London, plus there are shared-ownership flats available through housing associations where part shares cost from about £50,000.
'Look for places sandwiched between sought-after areas - they could be trendy and more expensive tomorrow'
Analysis by London-wide estate agent Winkworth reveals that Haringey, Hendon, Tottenham, Barking, Wembley, Crystal Palace, Forest Hill, Streatham, Surrey Quays, Edgware, Walthamstow and West Norwood are the cheapest areas in which to buy property. In these places, one-bedroom flats range from about £120,000 to £200,000. There are always property-buying opportunities in London, and resourceful buyers on modest budgets can be winners, too.
It pays to get to grips with big infrastructure projects, particularly transport improvements - new lines and stations - opening up parts of the capital hitherto hidden or overlooked by homebuyers. Early bird buyers can benefit from the longer-term boost to property values. Ripples are beginning to be felt along the recently extended East London line, where values are still relatively cheap.
Another tip is to look for places sandwiched between already sought-after areas: cheaper and unfashionable today, they could be trendy and more expensive tomorrow. Rotherhithe, between Shad Thames and Greenwich, is one such place. The area is a convenient halfway point between Docklands and the West End - a short hop to each on the Jubilee line at Canada Water station which is also an interchange on the East London line.
Southwark council is promoting the 40-acre Canada Water project, which will have up to 2,700 new homes, a library, offices, shops, bars and restaurants. The first phase of 900 homes comprises contemporary-design apartment blocks alongside a narrow canal, a legacy from the old docks era. Prices start at £235,000 (call Barratt on 020 7237 9311) while shared-ownership flats are priced from £74,375 (call Affinity Sutton on 0300 100 0303). The latter require a five per cent deposit of £3,720.
In general, south of the river is cheaper than north. Lewisham, in travel Zone 2 and bordering well-heeled Blackheath, is also worth investigating. The area has 15-minute rail links to Canary Wharf and Charing Cross, while a £250 million regeneration project spearheaded by the local council aims to transform the town centre.
Work has started on the first of 700 new homes. Two forgotten waterways - the Ravensbourne and Quaggy rivers - will frame a new park and square, while the rail and bus stations will be upgraded into a modern transport interchange. Renaissance is a four-acre scheme opposite the train station billed as a new hub, with work spaces and an eight-lane competition-standard swimming pool and leisure centre. Prices from £202,000. Call 020 8318 3999.
Kidbrooke, just south of Blackheath, has one of the UK's biggest and most ambitious council estate regeneration programmes.
Demolition of the concrete-clad Ferrier Estate is bringing new architecture and new forms of tenure such as shared equity, a departure from the old model of public rented housing.
Greenwich council began moving out residents in 2006, leaving the 276-acre estate neglected and a virtual ghost town. The masterplan envisages a new "modern suburb" with shops, offices, a school, health centre, sports facilities, a hotel and a new transport interchange at Kidbrooke station. Most of the new homes - 2,475 in all - will be privately owned, while about 500 will be shared-ownership properties.
Berkeley Homes, builder of upmarket apartments in the capital, is spearheading the £1 billion project and has Southern Housing Group as a partner.
Kidbrooke Village - the new name seeks to banish the old council estate connotations - is bordered by handsome Sutcliffe Park, and the setting is surprisingly green.
Amy and Jay Hoon identified it as an up-and-coming address with good transport links. Recently married, the couple, both 26, had been living with Jay's parents in Richmond, and were eager to get on the property ladder after starting their careers. Jay works for Ernst & Young at London Bridge and Amy is a researcher at Queen Mary, University of London, in Mile End.
They had managed to save a 30 per cent deposit and were able to buy a two-bedroom apartment, which they believe will turn into a good investment.
"Plans for the area are promising and the developer has a good reputation, which gave us extra confidence," says Amy. "For both of us, the commute to work is quick, about 30 minutes, and all in all it seems good value for money." Prices start at £207,500. Call 020 8331 7130.