It is not a great time to be a first-time buyer. Despite recent wobbles in the market, house prices remain high and deposits are increasingly hard to scrape together in a cost-of-living crisis. Rising interest rates also mean that it is now officially more expensive to own a property than it is to rent one.
Recent research by Zoopla found that, for the first time in more than a decade, rising interest rates mean that mortgages cost more per month, at an average of £2,546 in London, than renting a flat in the capital, which costs an average £2,053.
And yet people continue to strive for the rite of passage that is homeownership, by tapping the Bank of Mum and Dad, taking advantage of affordable buying schemes, and exploring far-flung boroughs in search of a home they can call their own.
The Evening Standard’s New Homes Awards will honour the best homes for first-timers at its awards ceremony this month. In the meantime, three buyers who have just got onto the property ladder explain how they did it.
“It doesn’t make sense for me to pay so much rent”
For Fili Limasi, choosing the perfect first home was all about convenience and investment potential.
She wanted to be close to work and the gym, and buy into an area on the up — and she managed both by moving to a two-bedroom, £600,000 flat in the Heart of Hale development in Tottenham Hale last November.
She was able to use the Government’s Help to Buy scheme before it closed to new applications, which meant she only needed to put down a five per cent deposit.
And flats at the site come with white goods and wardrobes, which cut down on her initial costs.
Fili, 29, works in King’s Cross as a business product specialist for Meta, and the commute from Tottenham Hale takes her just over 10 minutes on the Victoria Line.
When she was renting in Wembley Park the journey took her half an hour, which means she now saves more than three hours per week. She was also impressed by the spacious flat, which has a balcony overlooking Walthamstow Wetlands, where she often runs.
There is also a communal roof garden, co-working space and bike store and, when complete, the development will include two gyms. Fili is also hopeful that the regeneration of Tottenham Hale will see property prices rise around her. “Rent prices are so crazy at the moment and it doesn’t make sense for me to pay so much on rent when I could be paying a mortgage with that money,” she said.
Heart of Hale will be completed by the end of 2026. As well as 1,036 homes, there will be cafes, restaurants, a public square and a cinema.
Prices start at £425,000 for a one-bedroom flat, and £595,000 for a two-bedroom flat (heartofhale.co.uk).
“I got exactly what I wanted”
With Help to Buy no longer on the table, Natalie Holness, 40, used shared ownership to buy her first home — a two-bedroom flat she now shares with her partner and their two cats.
Natalie, a building control surveyor, bought a 35 per cent share of the £460,000 flat at the circa 500-home Southmere development, part of the wider regeneration of Thamesmead, south-east London.
She put down a deposit of £15,000, and her monthly bills come in at £980 for rent and service charges, plus £750 on mortgage repayments.
Natalie was already living in nearby Plumstead so she was familiar with the area. She fell for the development because of its iconic central lake, amenities including a co-working space and a concierge service, as well as its proximity to Abbey Wood station, which is on the Elizabeth line.
“Southmere is the best mix between suburban and urban life. You can go and have a wander by the canals, and the Thames is about a 15-minute walk away, so you have the Thames Path to enjoy. But if you do want to go into central London it doesn’t take much time to get there at all,” said Natalie.
She reserved her flat off-plan after studying a model of the site, and moved in last November.
“The flat I’ve chosen has a view of London, which is very rare, especially for the price,” she said.
“I chose the orientation and aspect based entirely on the model in the sales suite, and got exactly what I wanted.”
Prices at Southmere start at £113,750 for a 25 per cent share of a two-bedroom flat (peabodynewhomes.co.uk).
“I was ready for my own space”
Rosalyn Addai, 34, a speech and language therapist who works with children with special educational needs, also chose the shared-ownership route to buy her first home — a 40 per cent share of a one-bedroom apartment at the Barking Riverside development in east London.
Her share cost her £102,000 and she put down a £16,000 deposit. Her monthly costs — including mortgage, rent on the portion of the flat she doesn’t own and service charge — add up to £850.
This is certainly more expensive than her previous set-up — Rosalyn moved home during the pandemic to live with her parents in Holloway, north London — but it has many advantages when it comes to freedom and independence.
“By the end of lockdown, I was ready for my own space,” said Rosalyn. Priced out of her home turf of north London, she decided to expand her house hunt to include the east of the capital, and her online research tipped her off about the shared-ownership option.
“Barking Riverside offered modern homes within a vibrant, new development with good transport links between east and north London — everything I wanted,” she said.
“Upon entering the show home, I quickly imagined myself entertaining friends and family in the large, open-plan living area and out on the balcony, which is really what sold me the apartment.”
Rosalyn moved into her flat in November last year, but work on the 443-acre development with more than 10,000 homes will take another 10 to 15 years to complete. A new station has already opened to serve the site, and there are river bus services running, too. By the time the development is finished, there will also be a network of outdoor spaces and sports facilities.
“Barking Riverside has such a strong community feel, which I love,” said Rosalyn. “My neighbours and I have a Facebook group that we use to meet up for walks. The new ecology centre, The Wilds, has also just opened, with a coffee shop, an event space and a lovely communal garden.”
Prices start at £65,000 for a 25 per cent share of a one-bedroom flat (barkingriverside.london).
Sweeten the deal: save thousands with these tempting incentives
With high buying costs and the spectre of rising interest rates, developers are offering increasingly generous incentives to buyers.
At Ecole in Bermondsey, buyers will get a “bespoke package of incentives” including a five per cent deposit top-up, if you have a 10 per cent deposit. Stamp duty refunds, a contribution to legal fees, and money for furnishings are also on the table.
Work on this 56-home project with a communal courtyard garden will be completed by the end of this year or early 2024, and a spokeswoman for the developer, Higgins Homes, said around 60 per cent of buyers are first-timers.
Prices start at £527,000 for a one-bedroom flat and £675,000 for a two-bedroom flat (higginshomes.co.uk).
People looking out of London also have plenty of options to help bridge the gap between renting and owning. At Hillbury Fields in Ticehurst, East Sussex, buyers are being offered a £20,000 payment which they can use to beef up their deposits or spend on stamp duty or other moving costs.
The 30 homes are close to the centre of the village, which has a small clutch of shops and a few pubs and cafes. There is also a primary school, and Stonegate Station is three miles away.
Prices start at £350,000 for a one-bedroom house, and £395,000 for a two-bedroom house (fernham-homes.co.uk).
Housebuilder Bellway knows that getting on the property ladder is a challenge, so it has launched a mortgage contribution scheme, which offers significant savings on select plots. At its Goodsyard site, buyers can save up to £12,000 until November 30.
The development is aimed at commuters and is close to Bishop’s Stortford Station, with trains to central London taking less than 40 minutes.
Bishop’s Stortford itself is a thriving market town with a good choice of shops, pubs and restaurants, as well as lots of nearby open space to enjoy, including the National Trust’s 1,000-acre Hatfield Forest in Essex. There is an on-site garden too, featuring a chessboard and allotments.
There are just over 300 homes planned for the site, which is due to complete next spring.
One-bedroom flats start at £265,000 and two-bedroom apartments cost from £355,000 (bellway.co.uk).
First-time buyers looking for investment potential outside London could also consider Bankside Gardens. New transport links have a habit of helping push house prices up, and the on-site station, Reading Green Park, opened in May. Services to Paddington take just over 40 minutes.
This 461-home development is just south of Reading’s increasingly impressive town centre.
Residents benefit from a gym, a cinema room and a co-working space, and there is also a coffee shop and a supermarket on the site.
Incentives offered by the developer, Berkley Group, include a contribution towards stamp duty and service charge, and five per cent deposit paid as an allowance on completion. There are also mortgage subsidies available on selected flats for the first two years.
Prices start at £357,000 for a one-bedroom flat, and £399,500 for a two-bedroom flat (berkeleygroup.co.uk).