Shared-ownership homes in London: insurance giant Legal & General turns housing provider with launch of 50 first-time buyer flats in Croydon
London’s first-time buyer housing crisis is becoming big business. Insurance giant Legal & General is the first major institutional investor to move into the lower-cost housing sector, which has for decades been led by not-for-profit housing associations.
It has launched its first homes aimed at first-time buyers and plans to provide about 3,000 homes a year, in order to address what it calls a “chronic shortfall” in the amount of low-cost housing both to rent and to buy in the capital.
Its first offering is a tranche of 50 flats for sale on a shared-ownership basis in Leon House, a brutalist former office block in Croydon.
The 22-storey midcentury building was converted last year into 263 apartments, many with panoramic views of south London. Shared residents’ facilities include a roof terrace, co-working space and a private dining room.
Legal & General Affordable Homes, a subsidiary of the main insurance company, has bought 50 of the apartments and now plans to sell them on to first-time buyers on a shared-ownership basis.
A 25 per cent share of a one-bedroom flat starts from £88,125. In addition to mortgage repayments, buyers will pay rent of £606 per month and service charge of just over £100 a month.
Two-bedroom apartments start from £110,000 for a 25 per cent share. Rent on these larger homes will be about £756 per month, and service charge will be about £143 a month. Visit leonhouse-sharedownership.co.uk for more details.
The development is within an easy walk of East Croydon station, from where trains to Victoria take just 17 minutes.
It is also close to Croydon High Street and shopping centre, as well as to newer attractions including an outpost of the burgeoning Boxpark street food chain, although much-vaunted plans to build a £1.4 billion Westfield shopping centre in the town have been delayed indefinitely.
From £88,125: 25 per cent of a one-bedroom Legal & General shared-ownership flat at Leon House, Croydon
In the future Legal & General will be buying up blocks of homes to sell on a shared-ownership basis across the UK.
Next year it will have shared-ownership properties up for sale in Hounslow, west London, and at South Quay Plaza in Canary Wharf.
By moving into the affordable sector, Legal & General will not only earn rental income but will also be able to take a share in any capital growth when the properties are sold.
Experts expect to see this kind of private sector involvement in what has traditionally been a voluntary sector-run niche of the housing market becoming increasingly commonplace in the future, given the strength of demand for lower-cost homes in London.
Earlier this year the Greater London Authority reported that work started on 14,544 lower-cost homes in the capital during 2018/19, including rental properties as well as those earmarked for sale under various discount schemes.
This is an increase on previous years but still forms only a fraction of the numbers needed.