Can singles afford to buy property in north London?
PUBLISHED: 11:35 12 February 2016 | UPDATED: 11:44 12 February 2016
Camden is one of the least affordable places in the UK in which to buy property alone. So what's a singleton itching to get a foot on the property ladder to do? Here are the options.
Whilst shacking up for property purchase purposes sounds less than romantic, for free and flirty singles the London property market is more hot mess than hot date.
A 2014 survey conducted by Shelter put Camden at number one on the list of the top 20 locations in the UK that are least affordable for households on a single income.
“Thousands of Londoners are stuck in expensive and unstable private rented accommodation, with no hope of ever saving enough for a home of their own,” says John Bibby, Shelter’s policy officer.
Research conducted by Lucian Cook, head of residential research at Savills, also pinpointed the borough as unaffordable for singles.
Cook’s data analysis put Camden on the list of 40 locations across the UK where even an individual whose salary put them in the top 10 per cent of earners would be unable to buy property. These figures “show significant constraints on the ability of single income households to access the housing ladder,” he says.
Don’t rush to fire up your Tinder account just yet; the numbers show that loved-up couples fare little better when it comes to buying power. The Savills data found that in Camden a household of two dual earners on the same income would still have to be in the top 12 per cent of earners to be able to afford a home.
“It illustrates the particularly acute constraints on the ability to buy in London where homeownership is limited to increasingly affluent households, even where they have two incomes,” says Cook.
If two can be almost as bad as one, what options are out there for the north Londoner who dreams of buying a home alone?
“Options for single first time buyers are dramatically limited,” says Colin Payne, associate director at Chapelgate Private Finance.
“House prices have just run away,” he explains, meaning singletons could struggle to scrape together a deposit on a house unless they’ve got help from the Bank of Mum and Dad, he says.
Before you resign yourself to dying alone in rented property, however, know that there is hope. “There may be more options out there than you might think,” says Payne.
You might have to think outside the box (or live in one) in order to afford a house on a solo pay check.
Slightly bigger than the proverbial box are London’s micro homes. Pocket homes offer a range of studio apartments that, at just over 400sq ft, are big enough to swing that stalwart of single life cat in.
Specially designed to maximise a minimal living space, the homes are priced at 20 per cent below the market rate, and 80 per cent of Pocket buyers are single.
In order to qualify you have to be a first time buyer on an income of less than £71,000 who lives or works in the borough. Be warned, the flats are always snapped up super quick: Pocket homes are all reserved before the buildings are completed.
Don’t despair if you miss out on a micro home. “The new Help to Buy London will open up options,” says Payne.
Launched on February 1 this year, the new London Help to Buy scheme offers buyers a 40 per cent loan towards a new build property worth up to £600,000. The buyer then has to put down a deposit of five per cent, and take on a mortgage for the remaining 55 per cent.
Previously the scheme only offered a 20 per cent loan, with the number of buyers in Camden remaining in single figures. “The 40 per cent loan is a significant enhancement that will be a huge plus for single first time buyers,” says Payne.
“Of course it is restricted to new build properties but there are certainly more of those becoming available in the areas bordering the borough.”
Help isn’t limited to the Help to Buy scheme, either. There is an increasing number of lenders offering 95 per cent mortgages, although that still leaves would-be buyers stumping up for a 5 per cent deposit on their own. With an average price of £755,712 for a flat, according to the Land Registry, that’s an average lump sum of £37,786 for hopeful Camdenites.
That’s a hefty amount for someone on a single income, but lacking a significant other to share the mortage with doesn’t mean you have to go it alone.Co-owning with a friend or family member is becoming an increasingly attractive option in the face of ever-rising house prices.
“Buying with a friend or family member may be the only way for some to get a foot on the housing ladder,” says estate agent Simon Gerrard.
But tread cautiously when getting into financial bed with friends. “Remember to treat decisions about the property as a business transaction,” warns Gerrard.
“It should be treated as dispassionately as possible, and the purchase should be treated as an investment move for both parties.” However much you trust your potential co-owner, it’s always best to get the agreement in writing, and always consult a lawyer to make sure both parties are on the same page. “Agree how the deposit contributions will be repaid as well as how any profit will be split when the property is sold,” Gerrard advises.
If sharing with a friend or family member sounds like it still has the potential to get sticky, there’s always that 21st-century failsafe of strangers: the internet.
Property Buyers Match (propertybuyersmatch.co.uk) is a website that brings together prospective property owners in London and along the Crossrail route. The service offers to match co-buyers according to their housing hopes and property preferences.
“People are not just looking for a partner in love anymore, they are looking for a partner to co-buy with and a property to fall in love with,” says founder Emma Leicester.
Camden and Islington are amonth the most popular areas for members of Property Buyers Match with 60 per cent looking for homes in north London.
If the heart is where home is, then perhaps romance isn’t dead after all.