One Streatham development, several ways to buy a flat on a budget

As the gentrification ripple spreads, a new scheme in Streatham is offering Londoners several financial options to help them buy one of 40 new homes.
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Until recently Streatham was best known as the south London district from which a young Naomi Campbell could not wait to escape and start her rapid rise to supermodel stardom.

Times have changed, however, and the ripple of gentrification that has all but engulfed neighbouring areas such as Brixton and Clapham is now flowing freely in the direction of SW2.

The average property value in Streatham Hill stands at £432,298, up 15 per cent in the last year according to Zoopla property website, and these prices have already put the area out of reach for many young Londoners.

But a new affordable homes development by housing association Network Living is offering 40 flats under a variety of different schemes that aim to reach buyers of differing financial circumstances.

Interest-free loan


Smart spec: Network Living's apartments at WareHouse

The scheme - WareHouse in Blairderry Road, SW2 - will have 62 flats when it is completed in February. About 20 will be available under a “shared equity” scheme where buyers purchase a flat for 80 per cent of its true market value, taking a low-cost loan underwritten by the association for the remainder. This loan is interest free for the first five years.

Of the other apartments, 19 are available under a new project, the Mayor’s Housing Covenant, backed by London Mayor Boris Johnson. Buyers of these homes can use shared equity or opt for shared ownership, buying between 40 and 75 per cent of the total value of the property and paying rent on the remainder. Alternatively they can go for a “rent to save” option, where they start off renting the property at a subsidised rate, giving them up to five years’ breathing space to save for a deposit.

This flexibility is clearly excellent news for buyers, although high local prices combined with strict rules on the maximum incomes permitted for applications to affordable home-ownership schemes of all kinds will present issues when it comes to the shared-equity option.

The maximum income for buyers of WareHouse one-and two-bedroom flats is £60,000. Full market price of the one-bedroom flats is £310,000, with two-bedroom flats at £447,500.

Under shared equity, buyers purchase 80 per cent of a property, and are given a five-year break before becoming liable to pay interest on the remainder at a competitive rate of 1.75 per cent. However, even 80 per cent of these prices isn’t cheap, at £295,000 for one-bedroom flats and £358,000 for two-bedroom flats.

With mortgage lending rules tightening, it is inevitable that those earning no more than £60,000 will need a hefty deposit to be able to swing a purchase.

The problem is more acute for three-bedroom flats priced at £572,000. An 80 per cent share works out at £458,000 and although the maximum household income allowed is more generous at £80,000, buyers will still need a very chunky deposit.

Martin Fillery, head of affordable homes at Currell, who is selling the properties, agrees this will be an issue for many, although he believes that some young buyers do have access to substantial deposits.

Those who don’t can apply for one of the other schemes - shared ownership or rent to buy - and Currell can offer advice on how much deposit will be required for each different option depending on individual circumstances. Funding issues aside, there is a lot to like about WareHouse. One of its biggest advantages is its transport links. Streatham Hill station is no more than five minutes’ walk away and trains to Victoria take just 17 minutes, with an annual season ticket costing £1,472. Brockwell Park and Tooting Bec are both around a mile’s walk away, so there is green space very nearby if not precisely on the doorstep, and Tooting Bec Lido is a must for those who scorn the need for heated swimming pools.

For shopping, eating and drinking, as well as a Tube link, Brixton is two miles — or a short bus ride — away. And while Streatham has not gentrified to the same extent as Brixton et al, there are glimmers that suggest it might be going that way.

An area on the rise
This summer’s annual Streatham Festival, for example, was themed around Hollywood glamour and featured workshops, screenings, arts and dance in a string of local venues. The new Streatham Hub has an Olympic-size ice skating rink - the only one in London - plus a leisure centre with a gym and studios, two pools, and a multi-sports hall. And the annual Streatham Food Festival is a fantastic showcase for a particularly multicultural part of the capital.

“You are seeing a lot of new pavement cafés on Streatham Hill, which is the longest [continuous] shopping street in London,” says Fillery. “There are new gastropubs and independent restaurants opening, and now that the ice-skating rink has been redone there is that sporting facility, too. I think we are seeing the benefit of a ripple effect from Brixton and Clapham starting to arrive in Streatham.”


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