The average house price in London is now £502,000 and the availability of affordable housing for those at the start of the property ladder, is becoming increasingly difficult to come by.
There have been attempts by the Conservatives to remedy this and their introduction of the Help to Buy Scheme enabled buyers to obtain a better mortgage deal than there 5% deposit would have otherwise offered, providing more chance of purchasing a property.
However the reality of how much help this actually provided is pretty pitiful to say the least as over the last two years just 70,000 buyers benefited from the scheme, just 3.5% of home purchases during this time.
While the future of the scheme could be in doubt, Mayor of London Boris Johnson has come to the rescue with a new scheme offering a route to purchase a property with no deposit or even a mortgage.
Share to Buy, part of the Mayors First Steps Scheme will look to enable buyers who want a London property, but don’t have the required income of £100k+ to obtain the mortgage required to reside in the capital.
Erith Park in Bexley is the first of such developments offering a mix of one to three bedroom flats from £139,950 to £245,000. There are 343 new homes on the development and both the Orbit Group and Wates Living offer a variation of methods through which to buy.
The overall idea of the scheme blurs the line between renting and buying. Buyers will pay a monthly ‘rent’ if you like and on doing so will receive a pre-determined share of the property.
Although this only equates to 1.8% in the first five years the buyer will gain greater amounts of equity as time goes on. They also have the opportunity to purchase more shares at any point up to the value of £5,000. Buying a home at the top end of the price range in Erith Park will set you back around £1,136 a month for a property valued at £245,000.
It could go some way in addressing the problem of affordable housing but as the scheme is still in its relative infancy this is yet to be seen. However as many struggle to even save a suitable mortgage deposit, those looking for an investment could certainly benefit.
South East London is not only considerably cheaper than its Westerly counterpart but also in high demand where property is concerned.
Research by leading online estate agent eMoov.co.uk found in its December Hotspots Index that Bexley was the number one most in demand location throughout the whole of the country (71%) and has been for the entirety of 2014.
With house prices having risen by 15% in Bexley over the course of 2015, investing through the Share to Buy Scheme now could see buyer’s quid’s in in the long term.