September 24, 2018
London round-up – new affordable homes on Olympic legacy sites and no more £100,000 properties
Now that the summer months have passed in London, the post-summer property market boom is very much in full force. Activity is ramping up as buyers look to move in before Christmas.
Our September round-up features some updates on London’s house price and mortgages. It features some development news that could have an effect on the capital’s property market as well.
Olympic legacy sites in London to receive affordable homes
It was recently announced by the Mayor of London, Sadiq Khan, that 3,000 new homes will be built over the next 12 years on the remaining three legacy sites: Queen Elizabeth Olympic Park at Stratford Waterfront, Pudding Mill and Rick Roberts Way.
City Hall will be working with the London Legacy Development Corporation to speed up the process.
Khan has also committed to an average of 50% affordable housing across the remaining three sites, in line with his pledge for housing developments on public land.
Stratford Waterfront will welcome 600 new homes, while 1,500 will be delivered at Pudding Mill and 900 at Rick Roberts Way, subject to planning permission.
In order to ensure 50% of homes are affordable across the three sites, the Mayor will invest in housing and infrastructure grants and proposed City Hall funding of around £10 million each year over 20 years. He will confirm this in his budget early next year.
“There’s no getting away from the fact that to deliver on this commitment costs money – but this is an investment, and City Hall and the public sector in general will benefit from council tax and business rates thanks to the regeneration of the area,” he explained.
Tackling London’s housing crisis has remained one of Khan’s top priorities since he took office. He began 12,555 starts of affordable homes in 2017-2018, including 2,811 homes with rents based on social rent levels.
No more properties for under £100,000
It might not be a huge surprise, given the boom in house prices seen in London in recent years, but there are now no longer any properties for sale in London for £100,000 or less. Meanwhile, there are just four on offer available for £125,000 or under – which would make them exempt from stamp duty.
The most affordable property on the market in London today is on offer in Havering (asking price £100,000 or more). The next cheapest properties are available in Bexley, Croydon and Walthamstow. In most cases, with prices this cheap, sellers are only seeking cash buyers.
The decline of the £100,000 property in the capital has been on the cards for a number of year. There have also been wider calls for more affordable housing. Especially for those who are struggling to put together a deposit and who can’t rely on home-buying schemes such as Shared Ownership or Help to Buy. Both of which have upsides and downsides.
Mortgage approvals in London increase throughout August
London saw an increase of large deposit buyers last month. 41.5% of all loans in the capital are going towards this part of the market. This is according to the latest mortgage monitor from chartered surveyors e.surv.
This figure dominated the overall UK increase (2.7%). 66,543 mortgages were approved during August. The proportion of mortgages approved to borrowers with small deposits, including many first-time buyers, increased to 22.8%, up from 22.1% in July.
With the recent Bank of England interest rate rise, home borrowers are trying to secure a low fixed rate deal while borrowing is still relatively cheap. Interest rates are set to increase again in 2019 and 2020, by 0.25% each time, according to financial experts.
London was the most difficult market for those with small deposits to contend with, though, as just 12.1% of all loans went to those with small deposits during August.
That’s all for now. We’ll return in October with the latest London property news.
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