Two new neighbourhoods boasting hundreds of affordable homes will be built in Newham, following a £78m injection from Homes England.
London is a hotbed for house-building, but it can be tricky finding out about the best new developments before the affordable homes get snapped up.
Here, we take at some of the new housing developments offering affordable homes around London.
What is affordable housing?
The term ‘affordable housing‘ has been thrown around a lot lately, especially in London where prospective buyers are stunted by sky-high house prices.
While it may seem simple at face value, affordable housing can actually take several different forms.
London Mayor Sadiq Khan provides funding to build three main types of affordable homes:
London affordable rent
London affordable rent homes are designed for low-income households based in London. To be considered ‘affordable rent’, the home can’t cost more than 80% of local market rents, including service charges.
The Greater London Authority (GLA) is responsible for benchmarking the maximum amount of rent that can be charged on a property for it to be deemed affordable.
These benchmarks are increased annually in line with the Consumer Price Index (CPI) measure of inflation for the previous September plus an additional 1%. The weekly rent benchmarks from 2017-18 to 2019-20 are shown in the table below:
|Bedsit and one bedroom||£155.13||£150.03||£144.26|
|Six or more bedrooms||£200.73||£194.13||£186.66|
Source: London Assembly
London living rent
London living rent homes are for middle-income households who currently rent and want to save up to buy a home.
Rent for these properties is calculated as being one-third of average earnings in each local authority based on ONS data.
This currently averages at £1,000 a month for a two-bedroom home.
Shared ownership is a scheme that allows you to buy a share of a property and pay rent on the rest. It’s designed to help people on lower incomes, with small deposits, get on to the property ladder. You can find out more in the short video below.
Where are affordable homes being built in London?
We’ve rounded up several new-build housing developments in London that will offer affordable homes.
Some properties will be ready as soon as spring this year, so keep your eyes peeled if you’re hoping to snap up a new home soon.
You can also check out our guide on buying a house or flat in London for advice on securing a property in the capital.
1) Pocket Living affordable homes, various locations
Pocket Living is a development company that produces affordable homes across London.
All of its properties are sold at a minimum of 20% less than the market rate of a particular area – meaning that they meet the Mayor of London’s affordable housing criteria.
As of May 2017, the GLA has awarded Pocket Living a total of £51.4m to deliver at least 1,059 new affordable homes to the capital.
Pocket Living has already completed developments in Wandsworth and Ealing. Below is a round-up of some of its new developments:
Addiscombe Grove, CRO
- Location: Croydon
- Homes: 112
- Completion: Spring 2019
Addiscombe Grove is a 21-storey building designed by award-winning architects Metropolitan Workshop in the heart of East Croydon.
Once completed, the development will offer 112 one-bedroom affordable homes including external gardens, bike storage and residents’ lounge.
Varcoe Road, SE16
- Location: Southwark
- Homes: 57
- Completion: Spring 2019
A stone’s throw from London Waterloo, the Varcoe Road development will offer 57 one-bedroom affordable homes.
Residents of the complex will have access to a co-working space, sunroof, cycle storage and two landscaped communal roof terraces.
The development will also feature two accessible homes, which will be fully fitted for wheelchair users.
West Green Place, N17
- Location: Haringey
- Homes: 98
- Completion: Spring 2019
West Green Place will offer a mixture of 98 one and two-bedroom homes.
Based near Turnpike Lane and Seven Sisters stations, residents will be near cafes, playgrounds and the sports pitches of Downhills Park.
Whiting Avenue, Barking, IG11
- Location: Barking
- Homes: 78
- Completion: Summer 2020
The Whiting Avenue development in Barking will contain 78 new one-bedroom affordable homes.
Each home will have access to a cycle workshop, ample cycle storage as well as landscaped gardens with allotments.
2) Bow River Village, Tower Hamlets, E3
- Location: Bromley-by-Bow
- Homes: 740
- Completion: 2021
Bow River Village is situated between the A12 and the River Lea, London’s second waterway, which was made famous by the London 2012 Olympic games.
Previously made up of industrial and warehouse buildings, the new development is due to bring 740 new homes to the area, all of which will be available through the government’s Help to Buy scheme.
Phase 1 of the scheme has already been completed, delivering 219 homes and a 10,000 sq ft commercial space.
Phase 2 of the scheme will be launching later this year and Phase 3 will be completed by 2021. Both phases will include a mixture of homes for affordable rent and shared ownership as well as private rent and sale.
3) East Wick & Sweetwater, Newham, E20
- Location: Stratford
- Homes: 1,500
- Completion: 2028
Two new neighbourhoods will be built at London’s Queen Elizabeth Olympic Park by 2028.
The Sweetwater and East Wick communities will boast over 1,500 new homes, including 450 affordable homes.
New schools, green spaces, leisure and community facilities will also be built over both sites.
Work has already started on phase one of the development, which will include 130 new affordable homes, 105 for private rent as well as 33,000 sq ft of business and creative space.
It’s anticipated that phase one will be completed in summer 2023.
Getting a mortgage in London
Trying to get a mortgage for a home in London can be very tricky, especially if you’re a first-time buyer. In order to secure a mortgage, you’ll generally need a deposit of 5% of the property’s value.
Despite house prices beginning to dip in many London boroughs, they’re still over double that of the national average, meaning that if you want to buy a home in the capital you’ll need to save up a sizeable deposit.
Before you start looking for properties, it’s important to work out how much you can borrow to get an idea of the homes you might be able to afford. Most lenders will lend a maximum of 4.5 times the combined annual incomes of you and anyone else that you buy with.
They’ll also take a range of other factors into consideration such as your creditworthiness, debts, average spending, whether you have any dependents and other personal circumstances.
While some mortgage lenders will use automated systems to decide whether or not to grant a loan, others may be open to considering exceptional circumstances. Some lenders can be strict on the types of homes they’ll grant a loan on so, where possible, it’s also worth considering the property types to avoid if you want to get a mortgage to boost your chances of being approved.
- Find out more: how much mortgage can you borrow?