Red Loft: Unlocking your dream London home
Is renting really the only option?
The average monthly rent in greater London recently hit a staggering £2,500, according to The Guardian newspaper. For many of us embarking on our careers in the city, the assumption is that renting is the only affordable option – but is it really more affordable than buying?
With monthly rents for one bedroom apartments in Central London exceeding £3,000, many Londoners end up either renting a room in a shared house, moving back in with mum and dad, or moving out of the city altogether. The dream of owning our own homes in our twenties seems increasingly elusive, with an average age of a first time buyer in London now 33 years old. There comes a time in our life when we crave our own space and a bit of security. So, can Shared Ownership be the answer?
Shared Ownership has been around for many years now, but there is still a lack of understanding about it. Contrary to popular belief, it doesn’t mean sharing your home with someone else. Shared Ownership is a more affordable way to get on the property ladder. It allows you to buy a share of the home that you can afford, generally between 25%-75% of its market value, and you pay a rent to the housing association on the part you don’t own. A key benefit is that your deposit that is only a percentage of the share you buy and not of the full market value.
So how about the monthly costs of buying through Shared Ownership? Are there any hidden extras? Taking two postcodes in the London Borough of Southwark, we looked at how the monthly cost of buying with Shared Ownership compared to renting.
Out of each of the Shared Ownership developments we looked at below, the monthly outgoings (including mortgage repayments, rent on the remaining share and service charges), were less than those to rent a flat in the same postcode, making Shared Ownership a viable alternative to renting for many.
The Shared Ownership homes we used as examples were based on two bedroom apartments in the following developments delivered by Southwark Council both of which are launching soon, details of which are listed below. Rents at these two developments will be between 1.1% and 1.6% on the part not owned.
Vista Canada Water, SE16 is one tube stop from Canary Wharf and right next to Russia Dock Woodland. Marketed by Red Loft, it offers 19 one, two and three bedroom apartments for sale through Shared Ownership. All homes are on the fourth and fifth floors, most with their own private balconies and city views.
Estimated monthly outgoings for these homes are from £1,271 and prices start from £121,250 for a 25% share of a one bedroom apartment (full market value: £485,000). These figures assume a deposit of £12,125.
There are some restrictions in terms of eligibility; initially people living or working in the London Borough of Southwark will be given priority, and for the first few months the maximum permitted household income of buyers will be £52,825 for a one bedroom apartment and £72,454 for a two bedroom apartment. However, after the initial marketing period, households with a maximum income of £90,000 will be considered.
The second development example we looked at was The Bridge on Commercial Way in Peckham, SE15. This development offers 35 one and two bedroom homes for sale through Shared Ownership.
All apartments come with a private balcony or terrace and some with city views. Peckham Rye is the nearest station, with trains to London Bridge in 10-minutes and Burgess Park is just a 7-minute cycle ride away.
Estimated monthly outgoings start from £1,262 for a one bedroom apartment and prices at The Bridge start from £108,750 for a 25% share of a one bedroom apartment with a full market value of £435,000. These figures are based on a deposit of £10,875. As with Vista, similar income restrictions apply, and priority will be given to people who live or work in the London Borough of Southwark.
To find out more about either of these developments, both of which are launching shortly, call Red Loft on 020 7539 3745 or visit redloftproperty.co.uk/southwark.
Share to Buy is a one stop shop for affordable homes. On our website, you can search for properties, compare mortgages and find out all you need to know about alternative home-buying schemes such as Shared Ownership via our article index.