Press Article
LONDON LITE - Wednesday, 28 October, 2009
By Alex Kasriel
We never dreamed we could buy here
If you thought that buying your first home in a well-heeled, Zone 2 location such as West Hampstead, Clapham or Stoke Newington was just a pipe dream, think again.
During the past year property prices have come down significantly enough for first-time buyers to be able to afford homes in the trendy, hitherto out-of-reach environs of Maida Vale, Kensal Rise and Putney. Many buyers who had assumed they would be relegated to the outer zones of the Tube map to get a foot on the property ladder have found they can now buy in more central areas — where they actually want to live.
“We had a client who was only looking in finchley because they thought that would be all they could afford, but they have now been able to buy in West Hampstead,” says Jo Eccles, of Sourcing Property.
According to Ms Eccles, prices are still about 10 per cent lower than the peak prices of october 2007. “Something that was on at £550,000 can now be bought for £500,000,” she says.
Because of the price drops, young Londoners have been able to invest in the areas brimming with their favourite bars and clubs, where previously they had only been able to rent.
PR executive Laura Parsons, 31, was living in the suburbs of Surbiton but had always dreamed of buying a place in edgy Brixton, where all her friends from university live. After renting in Brixton for 10 months, she bought a two-bedroom flat on her street that was reduced by £15,000 to £280,000.
“The developers were desperate to get the money back from their investment as the banks had pulled the amount of money they would loan for their next project,” she says. “They were quite aggressive about progressing the sale. I got the keys at the end of August.”
In addition to capitalising on the lower cost of apartments, Ms Eccles says customers have also taken advantage of the savings on what would have been high stamp duties.
“£500,000 is a stamp duty threshold,” she says. “over £550,000 and you pay four per cent but otherwise you’re paying three per cent — so you’re saving another £5,000 as well as £50,000 on the price.”
For many first-time buyers, the return of the £200,000 flat, in surprisingly desirable areas, has meant they are able to get on the property ladder without having to compromise on location.
One-bedroom conversions, some even with gardens, as well as ex-local authority properties, have become available around this price, after disappearing from the market for several years. And for flats priced £20,000 or even £30,000 above that, sellers are now usually prepared to negotiate.
“If your budget was £200,000 18 months ago, you wouldn’t have been able to buy a one-bed flat in the worst part of London,” says Elan Silver, manager of the Haringey branch of Winkworth.
“What you would have got was a studio flat with not enough room to swing a cat. Now there is more choice.” On his patch — Turnpike Lane and Manor House — you could easily afford a one-bedroom, maybe even a two-bedroom flat, he says.
For £200,000 you can even get an attractive flat in the more desirable neighbouring areas of Stroud Green, Crouch End and Highbury.
South London is experiencing similar price drops. “Anything that was priced at £250,000 or £275,000 18 months ago is now going for £200,000,” says Luke Wooster, of Wooster & Stock.
Justin Bhoday of Kinleigh folkard and Hayward’s Kennington branch has seen property prices drop by as much as 20 per cent in oval and Stockwell, with two bedroom flats falling from £400,000 to £320,000.
While the market is recovering, with prices rising in the capital by 0.8 per cent in August (according to figures from the Land Registry), lenders are now prepared to offer mortgages with a 15 per cent deposit, so it’s a better time than ever to purchase the well appointed pad you’ve always wanted.