Help-to-Buy has become a fairy godmother for cash-strapped Londoners hoping to get on the property ladder.
The government-backed scheme covering homes valued up to £600,000 has been gathering momentum since a reboot doubled the size of the interest-free equity loan from 20pc to 40pc of the home’s value.
At a stroke this slashed the salary needed to afford a home in London.
Previously, many buyers’ incomes were too low for a lender to approve a 75pc mortgage, leaving a shortfall that could only be bridged by putting down a bigger cash deposit, usually an impossible outcome.
Without Help-to-Buy, a first-timer in London typically would need a £90,000 deposit, whereas under the scheme, buyers need just 5pc (usually between £10,000 and £25,000) of the purchase price and only require a mortgage for 55 per cent.
No surprise then that four in every 10 buyers of a new home are taking advantage of the low-deposit scheme, especially as the government has also now slashed stamp duty for first-time buyers.
Indeed, more first-time buyers are taking out mortgages than in any year since the banking crash a decade ago as lenders unveil record-low deals.
The Chancellor’s Help-to-Buy funding boost is generous but not infinite, so it makes sense for buyers to strike while the iron is hot as builders may quickly sell their allocation.
Together with the £600,000 price ceiling, the 40pc equity loan has opened up the market in all travel zones and made purchasing possible in posh, hipster and fast-improving areas with scope for more price growth.
In today’s cost-conscious climate, buyers want best possible value for money and are searching out districts that have yet to reach their full potential.
Fortunately, the capital is alive with regeneration projects, transport upgrades, cultural and employment shifts that are creating new property opportunities, even for buyers on modest budgets.
More than ever, London is a collection of micro markets where local dynamics such as well-regarded schools, historic architecture, even fashionable bars and restaurants, can lift prices beyond the area norm.
A splendid new £17m arts centre is a good reason to visit Harrow, the north-west London suburb synonymous with the prestigious boarding school for boys.
With a 600-seat theatre, cinema, gallery, cafes, bars plus refurbished performance spaces, the centre is a significant new culture and leisure venue, boosting the area’s draw at a time when the Building a Better Harrow regeneration initiative is upgrading the town centre and bringing more than 5,000 new homes.
In zone 5, Harrow butts up against the Green Belt and has a handsome Georgian conservation quarter plus lots of big interwar houses built at densities that would not be viable today, which combined with golf clubs, good schools and quick, 20-minute train links to central London make it a firm favourite.
University of Westminster’s media, arts and design campus is located here too, providing an energetic vibe.
Harrow Square, being built on a disused Royal Mail depot, is a sleek scheme of 318 flats designed by Chicago-based skyscraper specialists SOM architects. Four blocks rise from six to 20 storeys and are part of a new high street commercial hub that includes the new library, shops, offices and upgraded public spaces.
Many apartments are dual-aspect plus there are communal roof terraces with solar panels that help generate cheaper electricity for residents. Prices start at £348,000, well below the Help-to-Buy limit. It’s two-minute walk from Harrow-on-the-Hill station.
Looking eastwards, Newham is one of London’s golden boroughs, according to property analyst CBRE, being a continuing beneficiary of the 2012 Olympics legacy and a rising force in the capital’s economy and cultural identity.
Upton Gardens, a redevelopment of West Ham United’s old football stadium, is in a league of its own - a masterplanned new neighbourhood of 842 homes close to Stratford and Canary Wharf.
It’s a chance to buy into one of the cheaper east London districts on the up. Apartments, all with outside space, are spread across 18 mid-rise buildings set around communal gardens and a new tree-lined street, dubbed the “Legacy Route” to celebrate the stadium’s famous history. Prices from £334,995.
Remember that with Help-to-Buy no interest is charged on the equity loan for the first five years, though from year six, a fee of 1.75pc is payable, rising by RPI plus 1pc.
It is not a permanent fixed sum but an equity loan based on the value of the property. So it has to be paid back, within 25 years or when the property is sold.
To find out more about London Help to Buy works click here.