This week the Government pledged £1.5 billion to deliver an additional 20,000 new affordable homes over the next two years, on top of the 90,000 already promised.
Extra funding will raise the hopes of first-time buyers struggling despite recent price falls, and attractive homes will be made available from builders unable to sell stock on the open market.
These new homes will be a mixture of rented and private sale properties offered by housing associations and private developers.
The Kickstart programme, which gets stalled housebuilding sites back on track, is being extended, while local authorities will give greater priority to local people on council waiting lists.
The latter is an important change because local authorities also nominate people for housing association homes in their boroughs. So the message for young Londoners is: get on the council waiting list if you are not already. If you earn up to £60,000 you qualify for any of the Government’s affordable housing schemes.
Assessing the options
One problem is the confusing nature of these schemes. At the last count, nine initiatives were being offered.
The quickest and simplest way to familiarise yourself with these schemes and to register for one or more is to visit www.housingoptions.co.uk, billed as “the gateway to affordable housing”.
For those who want to buy rather than rent, the main initiative is Open Market HomeBuy, which splits into two schemes: MyChoice HomeBuy, an equity loan of up to 50 per cent towards a private market property, which is run by a consortium of housing associations; and HomeBuy Direct, an equity loan of up to 30 per cent towards a new-build property. This scheme is supported by the main housebuilders and several major lenders.
At Barratt’s New South Quarter in Croydon, 96 flats have been put into the HomeBuy Direct programme. Only 65 flats remain, starting at £178,995. Call 020 8688 0688.
HomeBuy Direct homes tend to get snapped up quickly because the scheme overcomes the single biggest problem facing most first-time buyers: raising a big cash deposit.
Shepherd’s Bush Housing Association has released new loft-style two-bedroom apartments at Issigonis House in Acton. Prices start at £80,000 for a 25 per cent share, the minimum equity stake that can be purchased.
Issigonis House is built on the site of a car factory and named after the famous engineer who created the Mini. Many of the 129 apartments were designed as live-work homes, but have been switched to fully-fledged residential.
The bonus for buyers is that some apartments are double-height and larger than average - up to 950 sq ft. The façade of the old factory has been retained, while the new-build contemporary-style architecture features lots of glass and timber decking plus attractive open communal atriums. Call 020 8743 5844.
Studios priced from £90,000, among the cheapest in London, are for sale at Fusion, a 196-home scheme in Croydon.
Fairview, the developer, is offering to pay 12.2 per cent interest for two years on deposits of up to 20 per cent. Called First Step, the initiative is aimed at buyers whose parents are using a nest egg for the deposit and who want a better return than they can get from savings in the bank. Call 020 8689 7666.
'It’s about lifestyle as much as an investment in bricks and mortar'
Graphic designer Jonathan Burch, 30, took advantage of another initiative called New Build HomeBuy to part-purchase a one-bedroom flat at Timber Wharf overlooking Regent’s Canal in east London.
For eight years, Mr Burch lived in shared private rented accommodation and had reached the age where he wanted to be in control of his own property. He registered online with housing association, One Housing Group, and was sent details of several developments where low-cost shared ownership was available.
“Timber Wharf was the first property I went to see. I loved it and decided to go ahead there and then. One Housing Group put me in touch with a solicitor and helped me to get a mortgage.”
Mr Burch owns a 25 per cent share of a £250,000 flat. His mortgage repayments are £450 a month and he pays another £475 a month in rent and service charges. “I work in Hackney, so the location is convenient. At first I was worried about the property crash, but previously I was paying roughly the same amount in rent so I felt I didn’t have much to lose. It’s about lifestyle as much as an investment in bricks and mortar.”