Help to Buy purchases in single figures in Camden and Westminster
- Credit: PA Wire/Press Association Images
The upward spiral in the London property market has put the government’s flagship housing scheme out of reach of most buyers in north and central London.
Only five buyers in Camden and seven in Westminster have bought homes using Help to Buy via the mortgage guarantee portion of the scheme.
Figures show that 3,841 people have taken advantage of the scheme across London, but the numbers are dramatically lower in more central boroughs where housing is most expensive.
The average asking price of a two-bedroom flat in Camden is £769,702, according to Zoopla, which is well above the £600,000 limit for the scheme.
Cllr Julian Fulbrook, Camden’s cabinet member for housing, says that the figures are impacted by more than just high property prices.
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He said: “It might help if we could have rent stabilisation in the private sector. If you’re having to live in Camden and you’re paying a vastly inflated rent, how are you going to save up for a deposit?
“Even people saving really really hard maybe with some money coming in from mum and dad are going to struggle to save a deposit.”
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Stefano Andrean, sales associate at Hadleigh Residential in Belsize Park, sold one of Camden’s five Help to Buy properties, an ex-local authority one bedroom flat, which was bought by a couple for £350,000.
Mr Andrean said: “I am very surprised that more people haven’t taken advantage of the scheme. We have plenty of properties for less than £600,000.
“We completed on a studio flat for £354,000 two weeks ago and we’re selling another next door for £350,000.
“You can get two-beds for under £600,000, there aren’t many and they’re on the small side, but we’ve got one for £565,000, and there’s lots of one-beds, which are ideal for a couple.”
Under the mortgage guarantee, where the government back 95 pc mortgages, lending is capped at 4.5 times a buyer’s average salary.
This means that buyers at the top end of the scheme with a 5 pc deposit – up to £30,000 – would need to earn an annual salary of £126,666, while to purchase a £350,000 flat with a 5 pc deposit, a buyer would need to be earning £73,889.
A paramedic earning a top band salary with London weighting takes home £41,436, while nurses typically earn around £30,000, including London weighting. A police sergeant in London earns around £47,540.
Mr Fullbrook said: “We’re trying at the moment to target some housing for key workers. The idea of these people being cleansed from central London is a disaster.
“It’s not good news for the local economy if these people are being forced out to live in rabbit hutches in Hertfordshire and are having to commute in on packed commuter trains.”
No homes in either borough were sold using the Equity Loan, where the government provides a loan of up to 20 percent on the price of new-build homes costing up to £600,000.
David Brand, associate director, sales at Chestertons St John’s Wood said: “Help to Buy just doesn’t fit this part of London.
“In St John’s Wood there’s really very little space for new building, which means that anything that’s built is of such a high value.
“New builds in St John’s Wood tend are multi-million pound developments because of this.”
Cllr Paul Dimoldenberg, leader of Westminster Labour group, said: “Money that’s being earmarked for stunts and gimmicks like Help to Buy is simply irrelevant to people in Westminster.
“The government would be much better off using the money they’ve allocated for schemes like Help to Buy to build new social housing.
“Often when Westminster builds it’s not new homes but it’s homes to replace those that are being demolished. There won’t be a net increase in homes.”
Housing Minister Brandon Lewis said: “Our Help to Buy scheme has helped create over 4,500 new homeowners across London, enabling them to buy with a fraction of the deposit they would normally require. Leading developers are building more as a direct result of Help to Buy; private housebuilding is up across London 24 per cent compared to last year.”