This guide will help you understand how to buy a new build in London for under £400k, explore affordable housing options, and plan your journey toward homeownership with confidence.
Why buying a new build under £400k in London is possible
It’s a common misconception that new build homes in London are only for those with large salaries.
While prices vary across the city, there are affordable options for first-time buyers if you know where to look.
Shared Ownership, the First Homes scheme, and other government initiatives like London Living Rent were devised to make new build apartments accessible even in high-demand areas.
What are the benefits of buying a new build home?
Buying a new build comes with several advantages:
- Energy efficiency – Modern homes are built to higher environmental standards, which usually reduces utility bills.
- Warranties and guarantees – Most new builds come with a 10-year warranty for added peace of mind.
- Modern layouts and amenities – Contemporary designs often include open-plan living, built-in appliances, and communal facilities.
For buyers looking to buy under £400k, these features can add value beyond the purchase price and make a new build a sensible choice.
How do affordable housing schemes work?
Affordable housing schemes work by helping buyers purchase a home without paying the full market price upfront.
Shared Ownership allows you to buy a percentage of a property and pay rent on the remaining share, while the First Home scheme offers discounted prices for eligible buyers.
These programs make it possible to access new build homes in London under £400k, providing an entry point for those who might otherwise be priced out of the market.
Shared Ownership: The key to affordability
Shared Ownership is one of the most effective ways to buy a new build in London under £400k.
By purchasing a share of a property rather than the full market price, first-time buyers can reduce their initial costs and still enjoy the benefits of homeownership.
How Shared Ownership Works
With Shared Ownership, you typically buy between 25% and 75% of a property’s value. You then pay rent on the remaining share to the housing provider.
Over time, you can increase your share (called Staircasing) until you own the property outright.
This approach makes it possible to secure flats for sale in London under £400k, even in areas where full-market homes are far out of reach.
Eligibility and income caps in London
Shared Ownership schemes have eligibility criteria, including income caps.
In London, your household income must be below £90,000 per year for first-time buyers. Other requirements include being a first-time buyer (or not owning another home) and meeting residency criteria.
Example of Shared Ownership Costs: Dagenham Green 2-bed apartment
To help buyers understand what Shared Ownership looks like in practice, here’s a real example of the costs of a 2-bed from Dagenham Green.
Property Value & Share Breakdown
- Full Market Value: £340,000
- Share Value (30%): £102,000
- Deposit Required: £10,200
Monthly Costs
- Monthly Mortgage: £498
- Monthly Rent: £545
- Monthly Service Charge: £248
- Total Monthly Cost: £1,291
New build homes under £400k from Peabody New Homes
West Ham Village
West Ham Village, located in Newham (E16), offers a rare chance to buy a new build home under £400,000 in Zone 2 London through Shared Ownership. Situated minutes from West Ham Station, this development combines excellent transport links with modern, high-spec living.
Homes available under £400k include studio and 1-bedroom apartments, with prices starting from £98,750 for a 25% share of a £395,000 home.
Buyers can get started with a 10% deposit from £9,875, making this an attractive option for first-time buyers looking to live close to central London.
Set within 12 acres of landscaped green space, West Ham Village offers contemporary interiors, integrated kitchen appliances, generous storage, and access to new local amenities. With multiple rail and Underground lines on the doorstep, residents can reach Zone 1 destinations in under 30 minutes.
Dagenham Green
Dagenham Green offers an excellent Shared Ownership opportunity for first-time buyers to purchase a new build home in London for under £400,000.
Buyers can choose from 1 and 2-bedroom apartments, with prices starting from £81,000 for a 30% share of a 1-bedroom home (full market value £270,000) and £102,000 for a 30% share of a 2-bedroom apartment (full market value £340,000). Deposits start from just £8,100, making this a realistic option for many first-time buyers.
All homes come with private balconies, modern interiors, and benefit from a carbon-neutral energy supply, helping to keep running costs lower.
The development is within walking distance of Dagenham Dock station and will feature over 10 acres of new green space, alongside planned community amenities.
North Gate Park
North Gate Park is a standout option for buyers looking to purchase a new build home in London for under £400,000 through Shared Ownership. Located in Haringey (N15), this Zone 3 development offers modern apartments amongst green space.
Homes available under £400k include 1-bedroom apartments, with prices starting from £96,875 for a 25% share of a £387,500 home. Buyers can get started with a 10% deposit from £9,688, keeping upfront costs accessible for first-time buyers.
Set around a 3-acre landscaped communal garden, North Gate Park offers private outdoor space to every home, alongside resident-focused amenities including a concierge service and residents’ lounge.
There are also great transport connections to central London, including fast links to King’s Cross.
Southmere
Southmere, in Thamesmead (SE2), also allows buyers to purchase a new build home under £400,000 via Shared Ownership.
Located beside Southmere Lake, this waterside community combines lakeside tranquility with excellent transport links, being 11 minutes from Canary Wharf on the Elizabeth Line.
Available homes under £400k include 1-bedroom apartments, with prices starting from £355,000 for private sale and Shared Ownership options coming soon. Deposits start from £35,500 (10%).
Southmere offers modern apartments with private balconies, access to communal amenities such as a residents’ lounge, co-working space, and concierge service, and is surrounded by 370 acres of green and blue space.
Arden
Located in Zone 2, between Greenwich, Blackheath and Lewisham, at Arden you can buy a modern apartment in a well-connected area at a more accessible price point.
Homes at Arden are available for private sale, with studio apartments priced from £389,000, keeping them within reach for buyers working to a £400k budget. These homes are ready to move into now.
The development forms part of a wider regeneration scheme and includes features such as private balconies, landscaped communal gardens, a fitness suite, co-working spaces and a concierge service. With Elverson Road DLR just a seven-minute walk away, residents can reach London Bridge, Canary Wharf and other key hubs in under 30 minutes.
Lombard Square
Finally, Lombard Square, in Plumstead (SE28), offers new build homes under £400,000 via Shared Ownership. Nestled around a 1.8-acre garden square, this development combines a sense of community with convenient connections to central London.
Available homes under £400k include 1-bedroom apartments, with prices starting from £100,500 for a 30% share of a £335,000 home.
Buyers can get started with a deposit from £10,050, making this an accessible option for first-time buyers looking to step onto the property ladder.
All homes come with private outdoor space, integrated kitchen appliances, and access to communal amenities such as a concierge service. Lombard Square is within walking distance of Plumstead and Woolwich stations, offering easy access to the Elizabeth Line and central London.
Are there other ways to buy a home under £400k?
Shared Ownership isn’t the only route to buying a new build home in London for under £400,000.
There are additional government-backed and developer-supported schemes designed to help first-time buyers access the market.
First homes scheme overview
The First Homes scheme lets you buy newly built homes at a discount of at least 30% compared to the open market value. The discount stays with the property, meaning future buyers will also benefit from reduced prices.
First Homes are aimed at local first-time buyers and key workers, with eligibility criteria set by local councils.
In London, the maximum purchase price is capped at £420,000 after discount, making it possible for eligible buyers to secure a home under £400k in many areas.
London Living Rent
London Living Rent is designed to help Londoners who can’t yet afford to buy a home but want to work towards ownership. It offers below-market rent, making it easier to save for a deposit while continuing to live in London.
Rents are set at a discount compared to private renting, usually based on local incomes rather than the market prices. Tenancies usually last three to ten years, giving renters time to build savings and improve affordability.
London Living Rent is aimed at people who live or work in London, don’t already own a home, and earn below set income limits.
What are some tips for buying a first home in London?
With the right planning, you can make the buying process smoother and less stressful. Here are some essential tips to help you navigate the journey.
Budgeting for deposits and fees
One of the first hurdles for first-time buyers is saving enough for a deposit. Lenders will usually want a minimum of 5-20% of the property price (or share price if you are buying through Shared Ownership), but putting down a larger deposit can give you access to better mortgage rates.
Don’t forget to account for additional upfront costs, such as:
- Stamp duty
- Solicitor or conveyancing fees
- Mortgage arrangement and valuation fees
- Survey costs
Creating a detailed budget and tracking your savings plan will help you understand exactly how much you need before starting your property search.
Understanding service charges and ongoing costs
For flats or Shared Ownership homes, service charges and ground rent can add to your monthly outgoings.
Other ongoing costs to consider include:
- Utilities (gas, electricity, water)
- Council tax
- Home insurance
- Maintenance and repairs
It’s important to factor in these recurring costs alongside your mortgage payments to avoid financial surprises.
Frequently asked questions about buying a home in London for under £400k
Yes - though it’s becoming increasingly rare, there are still options for first-time buyers. Developments like Arden in Lewisham offer studio apartments starting from £389,000, giving buyers the chance to purchase a modern, new build home in a Zone 2 location. Schemes like Shared Ownership and other government-backed initiatives can also make buying a new build more accessible if your budget is under £400k.
Shared Ownership means you can buy a percentage of a property (usually 25–75%) while paying rent on the remaining share. This reduces the amount you need for a deposit and mortgage, making homeownership more achievable in areas like London. Over time, you can Staircase, buy additional shares, until you own it outright if you wish.
The deposit required depends on whether you’re buying outright or through Shared Ownership. For a full purchase, most lenders ask for 5 - 20% of the property price, meaning a home under £400k could need a deposit from around £20,000 -£80,000. Shared Ownership allows you to buy a smaller share, so your deposit can be much lower, making it easier to step onto the property ladder.
