During the property boom, most young career professionals and key workers gave up hope of ever being able to get on the property ladder in an area close to their central-London workplace.
Their lot was to live in over-priced or unsatisfactory rented accommodation or in a cheap, dull commuter location where the journey to work was a hassle and the capital’s attractions too remote to enjoy.
With the property crash has come a silver lining — low-cost home-ownership deals, courtesy of the Government, allowing first-time buyers to buy or part-buy a stylish new-build flat in the heart of London. Some of the developments are genuinely top London addresses, such as Grosvenor Waterside, a swanky riverside estate in Chelsea where shared ownership prices start at £78,875.
Most of these opportunities are through the HomeBuy initiative, which operates through housing associations and private developers.
It is a chance for young Londoners to buy into an established or up-and-coming neighbourhood at a relatively low point in the property cycle, meaning there is investment potential as well as lifestyle benefits such as being able to walk to work.
‘Because prices have dropped by about 20 per cent, the affordability gap is closing’
Walk-to-work commuting has increased significantly since the terrorist bombings in July 2005: personal safety and the hassle of using trains and the Tube have influenced property-buying decisions. To meet demand, developers rushed to build more city-centre studios and one-bedroom flats, which is the main stock available under the HomeBuy programme.
“A lot of young people, especially those with City jobs who work long hours, want the convenience of living near the office. It’s a lifestyle thing,” says Andrew Palmer of estate agent DTZ. Most are happy to walk up to 30 minutes each way.
Because prices have dropped by about 20 per cent, the affordability gap is closing and in some boroughs the average price of a home compared with the average salary has returned to 2000 levels, according to analysis of government data by propertyfinder.com.
The City-fringe borough of Tower Hamlets now has the lowest house price-income ratio in London. The average property costs a little more than six times the average salary of residents whereas in Kensington & Chelsea, the ratio is 21.22.
Inevitably, well-connected areas ringing the main employment centres of the West End, City and Canary Wharf are popular with budget buyers because they are cheaper than very central postcodes. Areas falling into this catchment include Stoke Newington, Whitechapel, Rotherhithe, Brixton and Kilburn.
Yet regeneration is boosting so-called secondary commercial districts such as King’s Cross, Paddington, London Bridge and White City.
Affordable shared-ownership properties are available in these improving areas and are certainly worth considering. Usually, new office communities lead to better local amenities — shops, bars, restaurants — and residential values rise as the areas become more desirable places to live.
‘In some boroughs the average price of a home compared with the average salary has returned to 2000 levels’
Grosvenor Waterside is a swish riverside complex of 620 apartments built around a previously hidden dock constructed in the 18th century to bring in materials via the Thames for the building of Belgravia. The high-quality architecture includes a building by leading architect Ken Shuttleworth, while there is a fitness centre, crèche, concierge and car club plus an exhibition space in a link-up with Chelsea College of Art and Design.
Also, the scheme borders Chelsea Barracks, the trophy 13-acre site that is up for redevelopment. As a neighbourhood in transition, it is cheaper than “prime” Chelsea and the nearby Sloane Ranger heartland of boutiques and bistros. Ultimately, though, a transformed Chelsea Barracks will boost prices in the area.
Shared-ownership flats at Grosvenor Waterside are in a block called Woods House that is sandwiched between railway tracks into Victoria station and the dock basin, but they are desirable homes nonetheless.
Housing association A2Dominion is selling 84 one-bedroom flats through the New Build HomeBuy scheme. Buyers purchase an equity stake of between 25 and 75 per cent and pay rent on the chunk they do not own. Open-market prices start at £315,000, so the minimum 25 per cent stake costs £78,875. To qualify, buyers need an annual income of at least £30,192, or a joint income of £33,948. Call 0800 873 2159.
At Wilton Plaza, in nearby Victoria, the same housing association is selling shared-ownership flats priced from £81,875 for a 25 per cent stake. This once shabby patch in the prized SW1 postcode, immediately behind Victoria station, has smartened up in recent years and is now a neighbourhood hub with a thriving street market.
Bridges Wharf is a new arrival on the Battersea waterfront. The mixed-use scheme of 266 flats includes a luxury hotel operated by Von Essen Group and upgraded passenger facilities for the London Heliport.
Glass-fronted flats in a building called Orbis Wharf are for sale through Notting Hill Housing. Prices from £240,000 or £57,500 for a 25 per cent equity share. Call 020 8357 4444.
Join a new community on the other side of town
A charity worker on a low income, Drew Manley, 31, had abandoned the idea of buying property and resigned himself to living in shared rented accommodation. Then he found out about the government First Time Buyers’ Initiative, which enabled him to buy a £245,000 flat at Dalston Square, east London.
“The Government provides a loan for up to 50 per cent of the price. In my case, that amounts to £125,000. I’ve obtained a tracker mortgage for £112,000 so had to put down a relatively small deposit,” he says.
“The loan from the Government is interest free until the third year. It then goes up annually until it reaches three per cent, and is capped at that level. If I sell, the Government gets 50 per cent of the resale value, though I can buy more shares and reduce the size of the loan.” Manley, who works in Hampstead, moves into his new home in July. “For me, it’s quite luxurious and has an integral winter garden.”
The 550-home development is part of a new town centre for Dalston and is
alongside the new East London line station, Dalston Junction, opening
in 2010. Prices from £249,950. Call 020 7241 1833.