Londoners desperate for affordable housing camped out on the streets for up to two days straight to buy £199,000 ($US302,000) “starter homes” in a new development in London.
One woman called Grazyna Morwska even dragged her two children — son Radomir and daughter Monika — to camp on the streets so they could be in with a chance to get a new home.
In the end, 215 flats sold in just 3 hours and at £50,000 ($US75,800) over the asking price. The combined sales netted developer Galliard Homes £60 million ($US91 million).
But despite being billed as “starter homes”, 50% went to people who aren’t even going to live in them — buy-to-let investors and the parents who are buying them for their children.
That will likely spark anger in anyone trying to buy a house in London to live in. Prices are spiralling because of a chronic lack of supply and the problem is not helped by buy-to-let landlords seeing the market as a big money making opportunity.
13 flats didn’t even make it to the market because they were held back in order to be sold to existing clients of Galliard Homes.
The Trinity Square development in Hounslow, London, is the city’s largest purpose-built starter home scheme, with 228 properties ranging from £199,000-£315,000 ($US302,000-$US478,100) in price. Over 40% of the entire development is priced below £250,000 ($US379,400).
The flats are specifically designed and priced for first-time buyers and first-time investors by Galliard Homes and range from studios to one bedroom flats.
“Trinity Square is part of our ‘Get on the Ladder’ Campaign to provide hundreds of new homes priced below £300,000 in order to help Londoners get a foot on the housing ladder,” said Stephen Conway, Chief Executive of Galliard Homes. “We are proud to continue our role in providing much-needed housing and contributing to the regeneration of London.”
But the studios sold at an average price of £250,000 ($US379,400), some £50,000 ($US75,800) above the asking price. One bed flats sold for prices averaging £305,000 ($US462,900).
The people who bought the flats were split near 50/50. Half were owner-occupiers while the other half bought the flats for an investment and will likely rent them out for a profit.
London is now more than 40% more expensive than it was 10 years ago, according to the Living Wage Foundation and the Mayor of London, while the Office for National Statistics says the average price for a property in Britain’s capital is way over £500,000 ($US758,900).
The flats themselves are pretty impressive for “first-time homes.” It is difficult to find flats at this price in London that are not either ex-local council housing or in an old block of flats. The new development is a luxury apartment block but at a third of the price of other similar looking properties. It is in the former American Airlines European headquarters building, built in the 1980s.
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