Low-cost home-ownership schemes have been launched in west London where the first-time buyers pay no rent, only mortgage repayments. If you live or work in the borough of Hammersmith & Fulham and earn less than £64,000, this could be your chance to get on the property ladder at an address normally completely out of reach.
At Lime Grove Mews, Shepherd’s Bush, the local council has teamed up with developer St James to offer apartments that cost 30 per cent less than the market value as set by an independent surveyor. The gated development is being built on a former council depot and includes smart Regency-style four-storey townhouses as well as flats for sale on the open market, all ready for occupation next year.
NO BIG DEPOSIT NEEDED
Called Discount Market Sale, the new scheme helps first-time buyers overcome the hurdle of having to put down a big deposit. Buyers have full ownership of the property and pay no rent, only mortgage repayments. But a deed of covenant gives the council the right to buy back the property if the buyer chooses to sell. The owner would receive 70 per cent of the prevailing open market value.
So if the apartment has doubled in value since the time of buying, the owner would get twice the price originally paid. If at the point of resale the property has fallen in value, the owner would have to accept a proportionate loss. By retaining an interest in the property, the council keeps a stock of affordable homes and can offer the same flat at a relatively cheap price to another needy first-time buyer. If it cannot find a buyer, the property can be placed on the open market.
Discounted prices start at £220,500 for a studio (called “suites”). Call 020 3002 9460.
The advantage over conventional shared ownership is that no rent is payable. Buyers can live in the property indefinitely at a discounted price, and if they sell and prices have risen, they will profit. “It’s a fantastic and rare opportunity,” says Paul Hopkins, managing director of St James.
Shepherd’s Bush has a spring in its step despite the planned exit of the BBC from its giant Television Centre complex, and agents are predicting more price growth. Westfield — 40 acres of retail therapy and upgraded transport connections (a new West London line station linking in with the Central line) — has made a difference, while the council is upgrading the heart of the Bush, the eight-acre “Green”, into a user-friendly space.
Also, outline plans have been agreed for the redevelopment of Shepherd’s Bush Market, which borders a railway viaduct and conservation areas. The proposals are for 199 apartments, 13 mews houses, a new market square with stalls and small independent retailers plus an “artisans’ quarter”.
Pocket, a niche developer that targets young Londoners with limited budgets, is also collaborating with Hammersmith & Fulham council to offer affordable flats. Set up by a former City financier who has devised a clever business model requiring no public subsidy, the homes are typically 20 per cent below market value, starting at £160,000.
How is this achieved? First, the company buys cheaper infill plots passed over by developers scared off by the planning requirement to provide on-site social housing.
Second, its “do-gooder” brand finds favour with local councils, who allow higher-density schemes (more units) of entirely private flats. Third, factory design and space-saving ideas mean smaller but functional flats can be built cheaper.
Pocket is aptly named — small homes on small sites at small prices — and is proving a hit. Its debut development of 22 apartments in Camden sold out in weeks.
Another off the Harrow Road won an architectural award for its green design.
A scheme of 14 flats at Star Road, close to The Queen’s Club tennis centre in Hammersmith, has been so successful that the company has brought forward a nearby development called Apex Court. Other projects are in the pipeline in Hackney and Wandsworth.
BUILD UP EQUITY
To ensure on-going affordability, a restrictive covenant in the lease requires owners to pass on the 20 per cent discount when they sell. This is 20 per cent of the resale value, so owners can build up equity if house prices increase or the mortgage is reduced. New buyers must be within the eligible income bracket (under £60,000).
Buy-to-let investors are kept out by the application process, which is handled by the local council. And owners are not allowed to sub-let flats. To register, call Pocket on 020 7291 3682 or visit pocketliving.com.