A surprising new pattern is emerging as young London families struggle to cope with these tougher economic times. In an attempt to meet rising household expenses and university tuition and school fees, families are selling up, taking a cash bonus out of their homes and downsizing.
They are discovering that by selling their home in the capital they can expect a typical cash windfall of £270,000 if they move to a cheaper property, according to new research. In the past, downsizing was usually the preserve of older couples whose children had left home. Now, more than 30 per cent of movers are in the 36-plus age bracket.
“Moving to free up cash has become the main reason for selling homes,” says Stephen Noakes, mortgage director of LloydsTSB. “Homeowners on different rungs of the property ladder see it as a sensible option, especially in London where the potential cash windfalls available have risen by more than 40 per cent in 10 years.”
The term “downsizing” can be misleading, he admits, as many owners search for a home of equal size or status but in a cheaper area. “It’s all about value for money,” Noakes adds.
Some owners are switching to lower-priced London boroughs, others are fleeing the capital to get more for their money in the home counties, where property prices are flat or falling — and developers are willing to do a deal.
Despite “corridors of wealth” leading from the capital to the countryside and coast, family-friendly areas outside London are usually cheaper, even taking commuting into account. Once out of the city, every minute on the train knocks about £1,300 off the average house price, according to Savills.
Moving within London
Families hunting for cheaper locations in London are crossing the river from Fulham to Battersea and Balham; others are moving from Parsons Green to Putney, from Hammersmith to Shepherd’s Bush and from Clapham to East Dulwich.
Builders have spotted a gap in the market for affordable family homes in less expensive postcodes. High-lying and leafy Crystal Palace is one such location. Finally it seems the area’s charms are being appreciated by a wider audience, no doubt helped by a new East London line connection. The Rise, off Church Road, is a scheme of 23 three- and four-bedroom houses, with integral garages, priced from £450,000. Call Pedder on 020 7738 6839.
Agents confirm that buyers are selling higher-priced apartments closer to the centre and buying freehold houses, without service charges, in up-and-coming areas such as Nunhead, south-east London, where 12 modern-design houses at Glenton Mews, SE15, cost from £520,000.
Young families from north and west London are scouting Telegraph Hill, on the Brockley/New Cross border (postcode SE14). This Victorian conservation area has six-minute rail links to London Bridge plus two refurbished parks, a church, community centre, café and a highly-rated state secondary school. A semaphore signalling station once stood at the summit of the hill, from where there are amazing views of London.
Local estate agents’ claims that the area is “undervalued” ring true. Developer St James has built nine new traditional-style houses on a former reservoir at the top of the slope. Separate access to the ground-floor living area means the space can be used as a self-contained flat for letting out, a boon for young families who want extra income to help with the mortgage. Called St Catherine’s Place, prices start at £975,000. A similar house in Islington would cost up to twice as much. Call 020 3326 1550.
Further down the tube
“Often people simply move further along the Tube line to get better value for money,” says John Ennis, director of new homes at Foxtons. “What may look a long way out on the map is merely 10 minutes more on the train.”
The Jubilee line is a case in point because it provides a quick train connection from north-west London to the Canary Wharf banking district. Property prices get steadily cheaper as the train heads north of St John’s Wood to Stanmore at the end of the line. A scheme of 20 modern-looking townhouses, Argyll Place, at Pangbourne Avenue in improving North Kensington is launching later this year. Visit argyllplacekensington.com
Lime Grove Mews is a gated development of townhouses and apartments being built on the site of a former council depot in Shepherd’s Bush. Regency-style townhouses have open-plan ground-floor layouts that combine kitchen, dining and family spaces and open on to a garden, while at the top is a roof terrace with winter garden. Prices from £1.6 million. Completion is due in 2013. Call 020 3002 9460.
Another downsizing trend is middle-age movers selling big period houses to buy stylish riverside apartments, warehouse lofts and homes in converted mansions that have a sense of grandeur.
The Loxfords, Highbury Park, is attracting such buyers, according to estate agent Thomson Currie. As well as new-build homes in the 2.5-acre grounds, apartments with high ceilings have been carved from the original Victorian mansion. Prices from £395,000. Call 020 7226 0000.
Commuters have to juggle a number of factors when making judgments about where to live. Not least, they have to decide whether a cheaper house further away from the capital compensates for the hassle of a longer journey and a costlier season ticket.
Most families seeking the perfect combination of a manageable commute and a good-value home also want a quick dash to the station and an easy school run.