This week the Mayor of London announced plans for New, cheaper homes (up to £350,000) in London to be offered exclusively to UK-based buyers for three months before being marketed to overseas investors.
While some are applauding the initiative behind the scheme it can be said that not much research has been conducted on what this will achieve.
As we all know the property prices in London are among the highest in the world. Taking a quick look at the new developments in and around the Wapping area, you will not find a single new build property under £350,000 and you would even be hard pressed to find one under £500,000.
I have taken some time (10min) to sniff around on Rightmove and Zoopla. If you start your search on a wide area taking in the whole of London with a maximum budget of £350,000 you should find around 4900 listings (not too bad),
However when you add the filter to see only new builds and you do not want to see retirement or shared ownership property it is reduced to around 160 listings. If you take the 160 listings and go through them one by one and discount the double listings and the ones marked as new homes but aren’t you are left with around 120 available properties which are only studios or 1 beds.
And that is 120 properties in the whole of London!
Surely if I can find this in 10 minutes the Mayor’s research team should have come to a similar conclusion? Putting a £350,000 limit on this “landmark” plan makes it useless in the current London property market. It would make more sense to make the limit around £600,000 which is the current Help to Buy scheme (another can of worms I won’t get into now) limit.
However, the Mayor is at least taking a step (a very small one) in the right direction and hopefully they will do some further research before implementation so that it will have a bigger impact.
At least at this stage we can be certain that the approximately 8.6 million Londoners will have first dibs on about 120 studios and 1 beds.