London housing market: Help to Buy scheme and 90 per cent mortgages return — but more affordable homes are urgently needed


The urgent delivery of affordable homes is key to the capital’s recovery after Covid-19, but house price falls alone will not make homeownership more accessible for young Londoners.

Over the last 20 years house prices in the capital have outpaced earnings. Average wages have risen 98 per cent while property values jumped 302 per cent, according to Hamptons International.

As a result the average home now costs 12 times the average salary, not taking furloughed or cut wages into account.

Although experts have forecast house price falls of between five and 10 per cent this year, compared to a two per cent drop in earnings for those still working, lending has become stricter.

“The pandemic will of course impact low- and middle-income earners most, many of whom will be first-time buyers,” says Aneisha Beveridge, director at Hamptons.

“Even if house prices do fall, it’s likely some lenders will react by tightening criteria.”

Another concern is that prospective buyers who had been squirrelling away a deposit have dipped into it to survive the lockdown, just as the minimum deposit required has gone up.

From £485,000: Deptford Landings is bringing 1,132 new homes in six new neighbourhoods next to Deptford Park (020 7718 5202)

Extending Help to Buy

So what is being done to get the market moving? For starters, lending is beginning to ease, explains Hina Bhudia of Knight Frank.

“As the capital emerges from the worst of the pandemic, some lenders have reintroduced mortgage products at 90 per cent loan-to-value, which is a good start for first-time buyers,” she says.

Help to Buy loans have made a comeback, too. This is the shared equity scheme where the buyer has to raise a five per cent deposit, then borrows 55 per cent from the bank and the Government lends the remaining 40 per cent of the value.

As of May 1, first-time buyers could access two-year and five-year fixed Help to Buy loans through Santander. More lenders followed suit — and the Government is reportedly in urgent talks with housebuilders about extending the initiative beyond its cut-off next year.

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From £449,000: homes at Clarendon, a new Hornsey city village. Help to Buy available (020 3797 0226)

New homes in Hornsey, north London

Apartments with one, two and three bedrooms are available with Help to Buy in the Clarendon development, a new city village over 12 acres in Hornsey N8, which is more affordable than surrounding districts.

The average asking price in Hornsey is £497,333 compared to £602,700 in Alexandra Palace, £955,782 in Muswell Hill and £528,717 in Crouch End.

North London area Average asking price
Hornsey £497,333
Crouch End £528,717
Alexandra Palace £602,700
Muswell Hill £955,782

Clarendon will deliver 1,700 new homes when complete with a new public park and courtyards for residents, a gym and lounge. Prices start from £449,000 with Help to Buy available. Email sales.clarendon@stwilliam.co.uk or call 020 3797 0226.

Auckland Rise in Upper Norwood SE19 has one- and two-bedroom apartments on offer with Help to Buy. Prices start from £360,000 — call 020 3034 2656

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From £360,000: one- and two-bedroom flats at Auckland Rise in Upper Norwood, SE19 (020 3034 2656)

Is shared-ownership the answer?

Shared ownership has been growing in popularity over the last 10 years. Those with a household income of less than £90,000 can apply to buy a stake in a property while they rent the remaining share from a housing association and stump up a much smaller deposit.

Shared-ownership registrations have soared since the market reopened, up 167 per cent last week compared to the first week of the lockdown, according to the website Share to Buy.

“This is down to some mainstream lenders raising deposit requirements up to 15 per cent. This makes the average deposit in London £71,635,” says Nick Lieb of Share to Buy. “In contrast, the average deposit for a shared-ownership home is £12,935.”

Housing association Peabody is delivering 20,000 new homes as it leads the regeneration of Thamesmead in south-east London. Its new scheme The Reach in West Thamesmead has 185 acres of green space, seven kilometres of canals and five lakes on the doorstep.

Shared-ownership one-bedroom flats in The Reach all have private outside space — either a balcony or garden space — and start from £68,750 for a 25 per cent share.

Peabody also has apartments at Motion, a 17-storey tower that’s part of the transformation of Lea Bridge in E10, from £127,500 for 30 per cent of a two-bedroom home.

Visit peabodysales.co.uk for more details on both The Reach and Motion.

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Help to Buy available: prices in the current phase of Deptford Landings start at £485,000

Planners quicken the pace for new homes applications

A total of 20,000 new homes were started in the year to March — up from 16,364 in 2018/2019 but still less than a third of London Mayor Sadiq Khan’s annual target of 65,000 new homes.

“Councils are working so hard to process existing [planning] applications,” says Lisa Taylor, director of Coherent Cities.

“But it is also critical that the housing approved in this chaotic time is good quality,” she warns.

Ealing council has just approved plans for flats behind the listed Art Deco Hoover Building on the A40 in west London, while in SE8, Deptford Landings by Lendlease will offer 1,132 new homes in six new neighbourhoods next to Deptford Park.

Prices in the current phase of Deptford Landings start at £485,000. Help to Buy is available. Call Knight Frank on 020 7718 5202.

Countryside has 132 homes at Quartet in Clapton Common E5, a cheaper alternative to increasingly popular Stoke Newington. Prices start from £490,000 for a one-bedroom apartment. Call 020 3944 7129.

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Secured in lockdown: Josephine Redfern used shared ownership to get on the property ladder in east London

The garden is a plus

Hairdresser Josephine Redfern was renting in Hackney with friends when she decided to use shared ownership to get on the property ladder, securing a flat at Peabody’s new Motion scheme in Lea Bridge, east London, during lockdown.

“I’m really enjoying the communal landscaped gardens,” says Josephine, 33 (peabodysales.co.uk).



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