London's housing deposit boom amid the gloom
Back in 1995 it took Londoners 11 months to save a deposit for their first home. Today it takes an average of 10 years. This sobering statistic, from Barclays, has created what the Home Builders Federation calls a “locked-out generation” but the Government’s Funding for Lending scheme may go some way towards easing the paralysis in the mortgage market.
In January 2013, the scheme helped boost lending to its highest level in five years. Lending to borrowers with small deposits jumped 30 per cent, and higher loan-to-value mortgages are expected to become more plentiful during the rest of 2013.
Newbuy is soaring
Meanwhile, take-up of the government-backed NewBuy scheme, which makes home ownership possible for buyers with a five per cent deposit, is soaring. More than 3,000 people have taken advantage of the scheme, which applies to new properties offered by participating builders.
When launched in 2012, there were only seven participating developers and three lenders. Now there are 60 builders and six lenders. Interest rates on offer are lower than ever, less than four per cent, and additional funds have been allocated to allow another 16,500 people to buy.
Such government initiatives and the part-buy/part-rent shared ownership schemes provided by housing associations are a lifeline. The First Time Buyers Home Show at the Grand Connaught Rooms, Covent Garden on Saturday March 2, offers a chance to gather information on all these options and the specific developments covered. All the leading housing associations and some of London’s biggest builders are exhibiting. The show is sponsored by Nationwide building society and mortgage advisers will be on hand, too.
Qualifying NewBuy developments include Barratt’s New Central scheme in Woking, a 20-minute commute to Waterloo, where one-bedroom apartments cost from £173,995 and require a deposit of £9,000.
Queensland Road, Holloway, is part of the regeneration zone surrounding Arsenal’s Emirates Stadium. Newlon is selling shared-ownership flats priced from £75,000 for a 30 per cent share (full price £250,000), which requires a deposit of less than £4,000.
Four housing associations — Catalyst, Genesis, Network, and London & Quadrant — are working with Brent council to redevelop South Kilburn council estate, bulldozing Sixties concrete tower blocks and bringing architectural variety and 3,000 new homes, for rent, shared ownership and outright sale.
Kilburn Wells, the first of the new neighbourhoods, comprises two apartment schemes — Watling Place and Bourne Place, close to Queen’s Park station. Prices from £284,950. Call 0844 406 9294.
Family Mosaic housing association is promoting shared-ownership resales. These properties become available when existing part-owners sell up and move on. New buyers can purchase a lower or higher share (the usual minimum is 35 per cent). This suited Adam Balcerek and Sylvia Kunysz. The couple have a toddler, Gabriel, nearing two years old and needed a bigger space than the small and expensive accommodation they were renting in Docklands. So they bought a part-share in a two-bedroom resale flat at a recently built development in Rotherhithe.
“With a resale you get the chance to speak to the previous owners and find out how much they are paying for utility bills and see how space-efficient the apartment is,” says Adam, 42, who works for Kelly Hoppen Design.
Resales are on offer at Academia Way, Tottenham, where 40 per cent shares cost from £74,000, and at Oregon Building, Deptford, where shares cost from £47,500.
Shared-ownership flats in Hackney, Bermondsey South and Islington
Family Mosaic also has new shared-ownership flats at Lime Wharf, Hackney, a modern-design block of 28 apartments, all with outside space, plus there are communal roof terraces. From £495,000 for a two-bedroom flat. Call 020 7089 1315.
London & Quadrant housing association has a sizeable new development called Bermondsey South offering a five-minute commute to London Bridge. Shared-ownership apartments cost from £48,750 for a 25 per cent share (full price £195,000). Combined rent and mortgage payments start at £780 a month. Buyers need minimum savings of £3,950 and must already live in Southwark, Lewisham, Greenwich, Bromley or Bexley borough. Call 0844 4069800.
At Reliance Wharf, overlooking the Regent’s Canal in Islington, buying the minimum 25 per cent part-share of a two-bedroom flat priced at £284,000 would cost £1,500 a month in mortgage, rent and service charge. Contact Metropolitan housing association on 020 7226 6611.
* First-time Buyer Home Show: Saturday March 2, 2013: 10am-5pm, Grand Connaught Rooms, Covent Garden, London. Visit ftbhomeshow.com.