Help to buy London: the best boroughs to buy property through the scheme

Today, London is filled with tenants who cannot afford to buy the kind of place they want. Tenants in London are often accompanied by friends and would share a rented apartment before moving on to a home in a more expensive area. According to Savills, the average Help to Buy property in London is?410,000. This scheme allows buyers to buy a property with a 5% deposit and a 55% mortgage. The state provides the remaining 40% as an equity loan. This loan is interest-free for the first five year.
How Help to buy works in LondonFive percent depositSaving money for a deposit is the most difficult hurdle for potential homebuyers, even if the Bank of Mum and Dad offers assistance. Shutterstock / Seamind224Help To Buy schemeHelp To Buy is the Government’s solution to the problem many young people have when saving for a deposit to purchase a home. PAGovernment loanHelp To Buy allows buyers to deposit a five percent deposit. The government loans 40 per cent of the purchase price.Shutterstock / Andrey_PopovMortgageBuyers then need to get a mortgage for the remaining balance, 55 per cent. Shutterstock / garagestockThe sumsIf you were spending ?500,000 this would mean finding a deposit of ?25,000, taking a government loan of ?200,000 and getting a mortgage of ?275,000.Shutterstock / YuricazacHow much do you need to earn? Banks generally allow you to borrow around three-and-a-half times your income, so a ?500,000 home would require an annual household wage of just under ?80,000.ShutterstockNew builds onlyThe scheme is only available on new build homes. How much can I spend?The maximum you can spend under Help to Buy London is ?600,000.Shutterstock / Daniel LeinadPaying it backFor the first five years you simply pay your mortgage each month, plus service charges on new-build homes. In the sixth year you start paying interest on your government loan, at 1.75 per cent, growing yearly in line with inflation.Shutterstock / FeelkoySelling upWhen you sell up you repay the equity loan plus a share of any increase in the value, leaving you with your original stake plus the capital growth earned on your portion of the property.Daniel LynchWhen will the scheme end? The scheme will continue at least until 2021, according to the Government. According to JLL data, homes in Hammersmith & Fulham are the most expensive at?552,654. CBRE chief Mark Collins says that Help to Buy availability is often a sign of larger efforts to revitalize areas. This provides an economic boost and much-needed homes. First-time buyers have more options because of improved transport links. They can easily move to areas within their price ranges without having to travel a significant distance. “THE HELP to BUY TOP 10” New research by Homes & Property has revealed which boroughs have had the highest number of Help to Buy sales over the past year. Havering, Greenwich and Hillingdon are next. Lewisham is third. CBRE has the remaining top 10 boroughs, in order: Croydon Tower Hamlets Bromley Barking & Dagenham, Croydon, Greenwich, Hillingdon and Bexley. The average Help to Buy price in Barnet is?468,289, compared to the average home price of?556,761. Michael Fisher from Savills says that this area of north-west London is close by green open spaces and has a rural feel. “The borough has three golf clubs, an equestrian center, and a sandpit. This gives the borough the feeling of being able both to enjoy country pursuits and work in London’s West End. He recommends pubs like The Rising Sun in Finchley, The Bohemia at Finchley, and Adam and Eve in Mill Hill. The regeneration of Brent Cross Shopping Centre and surrounding area will bring yet more homes, retail and amenities.BARNETSavills is selling a range of homes, from one-bedroom flats to four-bedroom townhouses, at The Claves in NW7.The development, a third of a mile from Mill Hill East Tube, is part of the Millbrook Park masterplan which will deliver 2,000 new homes and a new primary school. A concierge service, gym, and bicycle store are available to residents. Prices start at?425,000 for one-bedroom apartments. Call 020 7409 8756 for more details.CROYDONCroydon council-owned developer Brick by Brick offers homes to locals first but after the initial two-month period sees first-time buyers coming from the more expensive neighbouring boroughs of Southwark and Lambeth. Colm Lacey (Managing Director of Brick by Brick) says that “Help to Buy” is a key factor in attracting people into new areas where they have no ties. “Some people are moving north of the Thames. Brick by Brick has permission to build 15 two-storey and three-storey houses in Upper Norwood. TOWER HAMLETSHelp-to-Buy can also be combined with other incentives to lure potential homeowners to a new area. Prices start at?390,000 for the 83 one, two, and three-bedroom apartments, which are located above a new primary school. Call 020 8023 8751 for more information.A stamp duty holiday for first-time buyers is another common offer.But even with a little help from the Government and some seasonal goodwill from the developers, first-time buyers in London today need deep pockets and an open mind to breaking new ground to get on the housing ladder.HACKNEYFirst-time buyers Jack Rawlings, 27 and Rebecca Johansson, 24, thought they would be priced out of Hackney, but Help to Buy has allowed them to stay.They have bought one of five new flats in a Grade II -listed Georgian townhouse at NestEast’s scheme, 15 Clapton Square. “Help to Buy made the purchase possible for us and we decided to accept the 20% interest-free loan which has allowed us to get on the property ladder,” Jack said. Sam Jaffe and Seniz Gokdemir, both 30 years old, were renting a one-bedroom apartment in Enfield Chase and wanted to upgrade to a three-bedroom duplex in Waltham Forest at Endeavour. This is the Fairview New Homes development in Highams Park E4. “We had been saving for a while, but when we found out that London Help to Buy could help reduce our deposit, we decided it would be the best route to the property ladder. We then turned our attention to new build properties,” says Seniz. Endeavour has two-bedroom apartments starting at?385,000. For some tenants, Help to Buy is the only way to afford a home in London. Michael was originally from Essex. He saved for a deposit for seven year and bought Legacy Wharf in Stratford E15. He said that he was frugal with his money and saved a lot of money every month. I always stated that I wanted a large enough amount of money to cover my monthly payments. The apartments were well-priced and offered incentives for first-time buyers. Michael says that he also likes the location. Prices at Legacy Wharf start at?386,500. Bellway Homes can be reached at 020 3092 9383.