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London house prices: 'I tried to buy a house in London as a first-time buyer and this is what happened'


12-20-2020

It's never been harder to get onto the London property ladder despite London Mayor Sadiq Khan's Homes for Londoners scheme

By James Bayley

I went looking for my dream home in Peckham (Image: James Bayley)


Coronavirus is scary, not least because it's a highly contagious, often deadly virus.

The pandemic has also made us more isolated as a society, which has revealed many of the deep-lying issues within rented housing in London.

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Like many people, I was forced to work from home with little indoor space and no garden.

I worked many hours, using my bedroom as an office in the blistering summer heat, set to the chorus of Peckham's restless Rye Lane.

Over 50 per cent of my income was going towards rent, but I am one of the lucky ones as the end of the eviction ban looms large for many.

According to a study by housing charity Shelter, only half (51 per cent) of private renters in England said their home felt safe during the pandemic.

It also stated that 30 per cent of private renters in London are worried about their housing situation in the event of further lockdowns.

After my experiences during the lockdown, I can safely count myself in that 30 per cent bracket, and it was this feeling that motivated my sudden interest in home ownership.


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Armed with a deposit bolstered by a lack of summer socials in London, I sought to take advantage of the 14 per cent drop in average house prices in the UK heading into 2021, according to the Centre for Economics and Business Research.

However, early glances on my Rightmove wishlist didn't exhibit many coronavirus discounts.

In fact, what it showed was that London was the exception to the rule, with house prices projected to decrease by just 1 per cent in 2021.

I weighed up my options and decided shared ownership would be my best bet, as part London Mayor Sadiq Khan's Homes for Londoners scheme.

Shared Ownership means the buyer needs a 25 per cent share in the new property, which in London is likely to be upwards of 620,000.

However, despite owning just 25 per cent of the property, I would still be liable for 100 per cent of the service charges.

I worked out that I would be able to pay for the mortgage and rental fees if I took shared ownership on a three-bed property and lodged the other two bedrooms.


Unfortunately, the scheme doesn't take into account any payments you might receive from friends, family or tenants when calculating your eligibility, even though lodging your shared-ownership property is completely above board.

I was then told that with my finances, I would need to look at properties around the 300,000 mark.


Firstly, this is less than half the value of the average asking price in London and secondly, most shared ownership properties are new builds and therefore more expensive.

To add insult to injury, I was told that buying with a partner would increase my chances of success in shared ownership.


However, unfortunately, lockdown life hasn't been very conducive to dating for me and I'm not ready for such a commitment.

Based on all the evidence I've obtained, it doesn't look like I'll be able to afford Sadiq Khan's "affordable homes" anytime soon.

Have got a housing story to tell? If so, email james.bayley@reachplc.com

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