Affordable Housing London-Style

Generali

http://www.theguardian.com/money/2015/aug/24/affordable-shared-ownership-flat-hackney-1m

A shared ownership flat valued at more than £1m has gone on sale in east London, in another sign of London’s growing affordability problem for would-be homebuyers.


Shared ownership, offered through housing associations, is designed to help people on low incomes get on the housing ladder by offering them the chance to buy a stake in a property which they can increase over time. The buyer also has to pay rent on the remainder of the property that is not mortgaged.
However, rising house prices in the capital mean even this kind of “affordable” housing is getting more expensive. The three-bedroom flat in a new award-winning development near fashionable Old Street in Hackney is valued at £1,025,000, with buyers offered a minimum stake of 25%.


The advert for the sixth-floor flat, which is being sold by Islington and Shoreditch Housing Association (Isha), says priority will be given to local authority and housing association tenants, ministry of defence workers and people who live and work locally to Hackney.


But the housing association estimates that to afford a 70% mortgage on the £256,250 share, and have enough money to pay a rent on the remaining 75% of the property as well as the monthly service charge, would-be buyers would need a household income big enough to afford more than £2,400 a month in housing costs.



A mortgage calculator on the Share to Buy website where the property is listed suggests it is unrealistic that a large enough loan would be granted to anyone with a household income of less than £77,000. The median salary in the borough is £31,000.

What could possibly go wrong...?

Graham_Devon

This is part of a larger story. Was being reported on the news this morning.

If I caught it right, it appears the average price now of "affordable" housing is £450,000 in London and £250,000 nationwide. When they say "affordable", it's the stuff built under the various government schemes.

It was stated that these sorts of figures are not affordable to those on the living wage when it's in full effect (£9 an hour) and unaffordable for the majority of working couples in the country based on household income.

The overarching point was that the affordable housing is now being targeted at those on above average incomes. Seems to be leaving those earning those larger incomes a little upset at only being able to afford "affordable" housing and everyone below them with no chance unless they have external help.

Generali

I realise that history shows that you've got to be a bit of a mug to bet against London house prices but seriously, a million squids for an affordable flat in Hackney.

That's 'F^%*ing mental', to use a technical term from asset pricing economics. I just can't see this ending well but perhaps I'm just a Cassandra.

chucknorris

Generali wrote: »

I realise that history shows that you've got to be a bit of a mug to bet against London house prices but seriously, a million squids for an affordable flat in Hackney.

That's 'F^%*ing mental', to use a technical term from asset pricing economics. I just can't see this ending well but perhaps I'm just a Cassandra.

We struggled to believe that my wife's 4 bed Victorian house is worth about £950k in Hackney, she bought it for £110k in the early 90's. At the moment her mother lives in it rent free, a bit frustrating for her because she is a bit of a hoarder and although she lives alone, it is packed with junk and looks a real mess, but she promised her that she could live there for as long as she wanted. A one bed flat or bungalow would be much better for her (she is an old 72 (for her age) and not very mobile), but she is stuck in her ways, otherwise my wife would buy something else for her to live in.

Mind you, if they ever re-make Steptoe and Son, she would clean up by renting it to them as a film set.

Graham_Devon

Theres quite a few others.

3 bed apartment in islington - £925,000 (£231k 25% share)
2 bed flat in Hackney - £725,000 (£187k 25% share)

Most of them are under offer - so people are buying them.

One at £675k says priority will be given to armed forces personnel. Costs £1,628 a month. So in my mind, you'd need to be taking at least 2.6k a month after tax (money will still ve very tight). Who is making that kind of money in the armed forces and starting out today needing property?

CLAPTON

the use of the work 'affordable ' is simply Orwellian double speak and has lost all meaning

shared ownership, especially at the 25% level, is in general simply fraud

kabayiri

200,000 Brits live in trailer parks apparently.

I think we have just discovered the answer for Londoners!

missyrichards

The comments in the Guardian about housing always say things along the lines of "Where will the nurses, dustmen, police live..." as if there are no other types of jobs in London. Is it the same person commenting or do several people just parrot the same thing? Maybe I should stop reading the comments.:p

ReadingTim

It's a relative, rather than absolute term; and generally reflects the demand for the land the property sits on, rather than the property itself.

You may think Hackney is a sh!thole, and compared to a lot of other places, it probably is; but sufficient people disagree with you enough to push up the price of land and demand for housing to get to where we're at now.

GunJack

kabayiri wrote: »

200,000 Brits live in trailer parks apparently.

I think we have just discovered the answer for Londoners!

not just Londoners I think.....

..we're getting more & more like the 51st State (of America) every day

Generali

missyrichards wrote: »

The comments in the Guardian about housing always say things along the lines of "Where will the nurses, dustmen, police live..." as if there are no other types of jobs in London. Is it the same person commenting or do several people just parrot the same thing? Maybe I should stop reading the comments.:p

With prices like that, the more obvious question is where will all the investment bankers live?

Will nobody think of the investment bankers?