As house prices stagnate and even fall in London, new research has revealed the capital’s most affordable spots for first-time buyers (FTBs).
According to data from the Office for National Statistics (ONS), overall property prices across London fell by 2.7 percent compared to 12 months ago with flat prices showing the sharpest drop of all at 4.3 percent.
The research shows the average deposit is now more than £100,000 in the capital, and even with schemes such as Help to Buy, many newcomers to home ownership simply cannot afford to buy in London.
Savills and Zoopla looked at average incomes for 18-30-year-olds in each borough and compared those to the average price of a flat or terraced house locally.
The most affordable area is Beckton in the borough of Newham where the average price for a flat or terrace is £161,267. The average salary is just over £55,000 in Beckton.
Next most affordable is Island Gardens in Tower Hamlets. There the average salary among the younger demographic is £97,000, and that is reflected in the average price of a flat or terrace at £284,042.
Chelsfield and Pratts Bottom in Bromley and Kenley in Croydon are also within reach of FTBs. Flats and terraces in these areas cost 3.25 times the average salaries for 18-30-year-olds – the Bromley average property price is £220,604 and in Croydon £201,770.
The research revealed that even in the more expensive boroughs, FTBs on higher-than-average salaries can still get on the property ladder.
For example, the North End ward in Hammersmith and Fulham has flats or terraces selling for an average £520,000, fives times the average salary for younger people.
Lawrence Bowles conducted the research for the Telegraph. He said: “As many young people in London share properties, rather than living by themselves, household incomes can be rather high.
“But that doesn’t mean those households can or want to buy together, which partly explains why many are still struggling to get on the property ladder.”
And Richard Donnell, head of research at Zoopla, said: “While affordability in London has improved, deposit levels remain over £100,000, making schemes such as Help to Buy London an attractive proposition.”
An iconic chocolate factory is to become the site of 1,386 homes in west London.
The Nestle’s factory at Hayes once made Milkybars but closed in 2015.
Now developers Barratt are reimagining the site as a new neighbourhood, retaining the factory’s Art Deco facades and entrance way while original features such as staircases and machinery will be incorporated into the new apartment blocks.
At its highest point of production in the 1950s, the Hayes factory employed more than 2,000 people, churning out the chocolate bar made famous by adverts featuring a cherubic blond cowboy and the iconic phrase “the Milkybars are on me”.
The new development will be close to a new Crossrail station that is expected to be open in 2020. It will include more than seven acres of green space and walking trails, while the existing canal towpath is to be upgraded. Workspace for small businesses will form part of the project.
The original factory was established by Eugen Sandow, a strongman who made his fortune in early Hollywood starring in Charlie Chaplin films.
He retired in 1913 and set up the Sandow Cocoa Works. Nestle bought the factory from him in 1929, establishing its first production site outside of its native Switzerland.
The new Barratt site will be named Hayes Village.
London’s mayor has intervened and overturned a decision not to grant planning permission for a major development in the north-west of the capital.
Now the project will go ahead and deliver 844 new homes in Mill Hill, with 41 percent of those affordable.
Barnet Council had rejected the plans to redevelop the disused Pentavia Retail Park a year ago, citing that the scheme was over-development and did not provide enough affordable housing.
Mayor Sadiq Khan then “called in” the planning application, which originally included 724 homes with only 35 percent of those affordable.
Since Mr Khan’s intervention, the developers have gone back to the drawing board, adding an extra 120 homes to their original plan. The level of affordable homes on the whole development has also risen to 41 percent and include some at social rent and London Living Rent levels.
The latest incarnation of the scheme now given the nod by Mr Khan will deliver more affordable homes than the whole of Barnet provided in 2017-18.
Mr Khan said: “This is the classic example of an underused site with the potential to deliver significant numbers of homes, including affordable homes at social rent and London Living Rent levels.
“It’s testament to the hard work of my planning team that, since I called this application in for further scrutiny, they have been able to increase the level of affordable housing even higher than it was previously.”
Plans for flats that would be smaller than a London cab could be given the go-ahead around the capital.
A report in The Times said developers are taking advantage of a relaxation in planning rules that allows offices to be converted into residential property.
The report outlines how one project in Purley in south London was approved by council officials in Croydon. It involved turning a ground-floor office into two flats, one of 8.3 square metres (89 square feet) and the other of 9 square metres (97 square feet).
According to The Times, the minimum standard required for a parking space is 11.7 square metres.
The latest development is to convert warehouse and offices in Barnet, north London, into 107 flats with more than half of those not having any external windows. Instead 56 of the flats would look out on to an internal “atrium garden” with natural light coming from seven skylights in the roof.
The Times quoted Julia Park, head of housing research at Levitt Bernstein architects, describing the Barnet development as “more like a battery farm than a housing development”.
She said: “Space, daylight and ventilation are basic necessities and this is lacking in all three.”
The relaxation in planning rules mean that a typical studio apartment can be less than London’s legal minimum of 37 square metres where residents share amenities.
The Barnet scheme has not yet been given the green light. A local residents group has objected to the plan, calling it a “cynical exploitation of planning loopholes”.
The number of new homes registered in London has more than doubled this year.
New figures from the NHBC, which provides warranties and insurance for new homes across the UK, have revealed that more than 7,000 new homes were registered with it in London between March and May, a rise of 125 percent on the same period last year.
Across the UK, more than 16,000 new homes were registered to be built in May, up 11 percent on 2018.
The NHBC said there has been new house building growth in eight out of 12 UK regions. London in particular is standing because a large number of new developments have started in 2019.
Steve Wood, chief executive of the NHBC, said: “It is encouraging to see such strong figures in May.
“This has been helped by the increase in the private rental sector and the upturn in London, fuelled by inward investors as well as new developments from established players.
“Of course, we will be working with developers to maintain and improve the quality of the new homes.”
The cost of leasehold is more than simply financial for many homeowners, according to new research.
A survey by the National Association of Estate Agents (NAEA) has revealed that homeowners who own a leasehold property pay on average £319 every year on ground rent.
That means the domestic leasehold market in England and Wales amounts to some £447 million every year.
However, the financial costs are only one element of leasehold. One in 10 of those quizzed by the NAEA said paying for leasehold and worrying about rising costs affects their quality of life.
One in 10 had also seen their ground rent rising since they had moved into their home, usually within seven years of taking possession. One in five (19 percent) didn’t understand from their leasehold contract by how much their ground rent would rise.
And almost half (46 percent) told the survey they might not have bought their home if they had had any idea of the true costs of leasehold.
The Government has promised to reform the leasehold system in England and Wales. Leasehold means a homeowner must pay rent on the land on which their property stands for a specific period of time to the landlord or freeholder.
The Competition and Markets Authority (CMA) has launched its own investigation into alleged mis-selling of leasehold properties with buyers claiming they face escalating ground rent charges and expensive fees that combine to make their property unsellable.
The investigation aims to discover if people are fully informed of how leasehold works and their obligations under the system, while also investigating claims of excessive fees and unfair contracts.
Mark Hayward, chief executive of the NAEA, said: “Buying a home is one of the biggest financial and emotional investments we make in our lifetime, and once we’ve completed and moved in, we should be able to enjoy the property.
“But, unfortunately for those buying leasehold houses, the financial burdens continue, with ground rent payments to the freehold every year.
“Even though many leasehold contracts include a 10-year ground rent freeze, most developers sell the freehold on to a third party within a few years of completion, and those terms go out the window, meaning homeowners are faced with unexpected and escalating costs.
“It’s positive to see action being taken, with the recent announcement that the CMA will be investigating the mis-selling of leasehold properties, as for too long house builders and developers have not been transparent enough about what it actually means to buy a leasehold property.”
Home buyers keen to find their ideal spot in London should be looking to areas already pinpointed for regeneration.
In its Homes and Property section, the Evening Standard has identified seven neighbourhoods that are ripe for investment and new developments.
Plans include the construction of new homes, redevelopment of existing retail areas and improved transport links.
The Standard looked across the capital from east to west, north to south, to pick out the seven spots where savvy home buyers should be focusing their attention.
Their picks include Walthamstow, which is at the centre of a £200 million regeneration that includes 450 new homes and the transformation of the Mall shopping centre. Walthamstow Central Station is also being given a makeover while Walthamstow Gateway, close to the station, will have shops, cafes and flats.
The transformation of Tottenham is not confined to Spurs’ football ground. A £1 billion project will see a major redevelopment of the area between the stadium and the London Overground station, delivering 2,500 new homes, parks, shops and restaurants.
The station itself has been tipped to be renamed as Tottenham Hotspur, says the Standard.
Acton is pinpointed as the ideal location for first-time buyers, thanks to the regeneration of local council estates that will bring 3,300 homes and the creation of an urban village combining retail and offices.
Go west to Hayes where the former Nestle factor is being transformed into Hayes Village with more than 1,300 new homes. Nearby the former EMI building is also being redeveloped to create 642 new flats, restaurants, a cinema and a live music venue.
Bromley offers good value for both first-time buyers and those looking to move up the housing ladder.
There will be 400 new homes off the High Street with a third of those affordably priced for first-time buyers and renters. The plan also includes new shops and eateries, while 200 new houses and flats will be completed in St Mark’s Square later this year.
A new train station is the first part of a regeneration of Meridian Water in north London where a 210-acre zone will be the centre of 10,000 new homes along with office space.
Back in west London, a 42-storey skyscraper will help complete the Paddington Basin redevelopment, the last project providing more than 400 new homes and shops.
A total of £500 million will have been spent on the Paddington Basin project, providing hundreds of homes, cafes and restaurants.
Building on London’s rooftops could provide 180,000 homes and house a potential 720,000 people.
A recent relaxation of planning rules in the National Planning Policy Framework (NPPF) will allow homeowners and developers to build in the airspace above existing residential homes and commercial properties.
With a £10 million investment from London Mayor Sadiq Khan already in the bag for airspace developers, the new planning rules could extend the creation of rooftop homes and deal with the chronic housing shortage in the capital.
In a recent blog, building supplies expert Insulation Express analysed the number of people who share a square metre of space in UK cities.
Brighton and Hove packs the most people into that space with 10 individuals sharing every square metre in the seaside resort. In London, seven people jostle for space in a single square metre.
With developers tending to look at green belt and brownfield land as the places to build new homes, the potential to look to the sky for greater development is immense.
Insulation Express’ blog noted: “The shortage of available properties has long been recognised as an issue affecting our society, but building upwards could ease the demand in areas with less space and at a faster pace.
“In dense urban areas where there is a lack of development sites, rather than forcing people out of the city, upward extensions could allow people to live and work in city centres.”
Upwards extensions are also a more environmentally friendly way to build, says Insulation Express, because many developers use modular homes in this type of construction.
Its blog claimed: “Modular homes use marginally less materials than traditional construction, which makes them quicker to build and less damaging to the environment.”
A record number of affordable homes have been started in London in the last year, thanks to the financial help of City Hall.
New figures from the London authority have revealed that 14,544 affordable homes were started in the year 2018-19, exceeding the target of 14,000 agreed with the Government and the most in any year since City Hall began controlling housing investment in the capital in 2012.
The figures include the most council homes built in more than 30 years in London.
Housing has been a priority for Mayor Sadiq Khan since he took office three years. He has urged the Government to give him greater powers and resources to deal with the housing situation in the capital.
Mr Khan said: “Not only do these figures beat our own records from last year, but this is more than double the number the previous mayor started in the final year of his term.
“National Government needs to match our ambition and determination to deliver the homes Londoners so urgently need.”
The average prime property in London takes six months to sell, according to the latest data. And sellers are offering an average discount of 12.7 percent on the asking price of those prime homes.
The private bank Coutts analysed the current status of the prime property market in the capital to note that sales are at their lowest level since 2013.
Prime properties are those valued between £1 and £10 million with Coutts noting that prices of in that bracket have fallen since the first quarter of 2018.
Those keen to sell are willing to negotiate on price, too, with the biggest discounts offered on the most expensive homes. Those worth upwards of £10 million are being sold with an average fifth off the asking price at 21 percent.
Katherine O’Shea, of Coutts Real Estate Investment Service, says overseas buyers keen on a London home are quids in.
She said: “The current status of the pound means for that dollar-denominated buyers, prime London property is about 40 percent cheaper than it was in 2014, and for those using euros to make a purchase, it’s about 30 percent cheaper.”
Prime London prices are up by 0.4 percent in the first quarter of 2019 but 17 percent lower than their peak in 2014.