First-time buyers have rarely had it so bad. They need to borrow more money and raise a larger deposit than at any time during the past 25 years.
The price of a first home is 4.6 times the average salary, according to mortgage lender Nationwide. Many are having to wait until their late thirties to get on the housing ladder, while others have given up hope of ever owning a home of their own.
Remarkably, first-timers still account for 38 per cent of UK property purchases, proving that there are ways round the crisis even for those who cannot rely on the bank of mum and dad. Those who do succeed include frugal savers, consummate compromisers who have bought wrecks or taken in lodgers, canny shared-ownership buyers and determined bargain hunters who have searched out cheaper, up-and-coming areas.
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 these places, one-bedroom flats range from about £100,000 to £180,000.
'First-timers still account for 38 per cent of UK property purchases, proving that there are ways round the crisis'
Dominic Agace, Winkworth's chief executive, urges buyers 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. Over the decades, transport upgrades have proved to be a big boost to property values.
Price ripples are already being felt along the extended East London line. "Always there are property-buying opportunities in London, and resourceful buyers on modest budgets can be winners, too," he says.
Regeneration zones are worth looking at, but beware the hype. There is no shortage: Stratford, King's Cross, Elephant & Castle, Croydon, Cricklewood, Deptford, Royal Docks, Wembley. Some projects are more advanced than others, however. The point about regeneration is that it can take a long time — perhaps five years and maybe 10 or more for the true impact to be felt.
Places with promise
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, bordered by Shad Thames on one side and Greenwich on the other, 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, also an East London line interchange. Surrey Quays, an Eighties shopping and leisure precinct, is the main commercial hub. It lacks what today's urban planners call "a sense of place".
However, a second wave of regeneration is under way. Southwark council is promoting the 40-acre Canada Quays project, which will have up to 2,700 new homes, a library, offices, bars and restaurants. Barratt is building the first 900 homes. Called Maple Quays, it is a contemporary-design scheme alongside a narrow canal, a legacy from the old docks era.
A new phase of 126 apartments with floor-to-ceiling glass walls has been launched. Prices from £250,000. Call 0845 871 0045. Barratt's Alastair Baird says many of the homes sold to date have been bought by "knowledgeable locals who realise there is more to come in the area".
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.
'Look for places sandwiched between already sought-after areas: cheaper and unfashionable today, they could be trendy and more expensive tomorrow'
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. Housing association London & Quadrant and Barratt are building Renaissance, a four-acre scheme opposite the train station.
Alongside a 24-storey tower will be a dedicated commercial hub for creative sector employees. An eightlane competition-standard swimming pool and leisure centre are also being built. Flats in the first phase, called Florence Corte will be released for sale soon. Prices from £170,500. Call 020 8522 5555.
Stylish new apartments are coming soon at Silkworks, a tasteful-looking scheme next to Lewisham DLR station. Call developer St James Urban Living on 020 8469 0077.