Young renters who have been waiting patiently for prices to fall so they can buy a home can now find good-value only a short commute from central London.
With all the discounts and incentives on offer in many cases, it is now cheaper to buy rather than rent and young buyers can snap up flats priced below the reduced £175,000 stamp duty threshold, even in travel zones two and three, with speedy Tube links to the West End and City.
'London's dozen Tube lines are the veins of the capital's property map. It pays to study the local markets along them'
Deposit-paid deals are helping, too, allowing buyers to snap up a property without having to make a large down-payment. Moreover, new “rent-to-buy” schemes allow buyers to have their cake and eat it: they can rent for two years and then buy their home at a pre-agreed price, using the rent they have paid as their deposit. South-east London builder MacDonald Egan is offering this incentive at new flats in New Cross, Lewisham and Deptford.
Other developers are revamping the design of flats, aiming to attract low-budget co-buyers and sharers. “Duet” apartments have been launched by St George at schemes in West Drayton and Hendon. These homes have two same-size bedrooms, each with an en-suite bathroom. A single buyer could let the other bedroom to help pay their mortgage, and under the Government’s Rent-a-Room scheme, rental income up to £4,250 a year is tax-free.
By taking advantage of these deals and buying at or close to the bottom of the market, first-timers can avoid the spectre of negative equity that is haunting many who bought at the house-price peak two years ago.
Get a Tube map for starters
London’s dozen Tube lines are the veins of the capital’s property map. If you are a first-time buyer searching for a low-budget home, it pays to closely study local markets along the various routes.
Not all of the cheapest locations are at the ends of these lines — far from it. Affordable Aldgate and Elephant & Castle, in Zone 1, and New Cross, in Zone 2, stand out as up-and-coming districts. Tooting (Northern line) and Tottenham Hale (Victoria line) are other cheap areas to investigate.
Get there before the rest
There is a good case for house-hunting along the existing East London line during its two-year closure while work takes place and before it re-emerges as an Overground route from Hackney and Crystal Palace. According to website FindaProperty.com, homes along this line are the cheapest, on average, even though the line is the shortest in the capital and runs through desirable City fringe and Docklands areas, such Shad Thames, Wapping and Limehouse.
When the extended line opens in 2010, Hackney will be connected to the Tube network for the first time. New stations are being built at Hoxton, Haggerston, Dalston and Shoreditch. Among the cheapest places to buy on the Tube network are the eastern reaches of the District line — Bargen and Dagenham Heathway, for example.
In Stanley Street, New Cross, MacDonald Egan’s scheme of flats are priced from £190,000, while at the Princess Louise Building in Deptford, prices start at £205,000. Call 020 7234 9494.
Uxbridge is at the end of both the Piccadilly and Metropolitan lines. At The Heights in Uxbridge town centre, developer Oracle has slashed the price of one-bedroom apartments from £215,000 to £175,000. Call 020 7408 7509.
You don't have to be a key worker
The Government recently extended its affordable homes initiative, called New Build HomeBuy, to all first-time buyers; previously, only key workers qualified.
First-timers with household incomes of less than £60,000 a year are now eligible for shared ownership (part-rent, part-buy) new homes offered by selected housing associations and their private developer partners. To widen the net further, first-time buyers can boost their ability to buy a home outright by borrowing a government-backed equity loan, in addition to a normal mortgage, which defers payments for five years. The first step is to visit www.housingoptions.co.uk.
You can apply online and if you are eligible you will be sent details of available developments in the areas you specify. The two HomeBuy agents for London are Metropolitan Home Ownership and Tower Homes.
At Sense7, a HomeBuy scheme in Charlton, two-bedroom flats are priced from £152,500, and two-bedroom houses from £245,995. Call Intro Homes on 0870 445 0870.
On the right line
When the East London line reopens in 2010 it will run from Hackney to Crystal Palace, offering easy Tube links to the City, the West End and Canary Wharf.
In Hackney, Currell (call 0844 800 7909) has already sold 60 per cent of its Queensbridge Road scheme, with young buyers eager to invest before the line’s likely impact on local house prices.
‘Dad’s an architect, so I grew up being aware of good design’
A ballet dancer at the Royal Opera House, Iohna Loots, 32, has lived in rented property for the past eight years, most recently in a studio flat in Covent Garden.
“It was convenient for work and going out but I really resented paying all that rent,” she says.
© Stuart Saunders/Digital Nation
Last summer, she decided the time was right for her to buy. Dreading a long commute, her priority was to be within a 30-minute Tube ride of Leicester Square.
“I looked all over London and it was a revelation,” she says. “Some flats were tiny, others were run-down and poor quality, and there were places where I didn’t feel at all safe.”
Through a close friend living in West Hampstead, Iohna discovered Beaufort Park, a new mixed-use development in nearby Hendon, where 2,800 homes are being built at a former aerodrome. She paid £244,950 for a one-bedroom “Manhattan” apartment, an open-plan design that features a sliding wall between the bedroom and living room, ideal for a single person.
“The scheme ticked all the boxes. Being a woman and working unsociable hours, it was a relief to find a place where I can feel safe,” she explains.
“There is 24-hour estate management plus on-site shops and facilities. I tour abroad for several weeks a year and it’s reassuring to know someone is looking after my property. The flat itself is modern and smart. My father is an architect so I’ve grown up being aware of good design. Buying in a downward market didn’t put me off because this isn’t a short-term investment; I’m sure the market will recover. Besides, I’m convinced this is an area on the way up.”