This week's Q&A session with a senior figure in the UK housing industry sees Marc Da Silva talking to Vicky Savage, group development director of Network Housing Group.
Where is your firm offering new homes? As a group we operate in 26 London boroughs and in Hertfordshire. We are constantly seeking new land opportunities.
What are housing market conditions currently like in those areas? The housing market in London is really booming, demand is high and prices have been increasing. For example, we have seen increases in Lambeth and Brent of circa 40%.
We are also finding that as prices rise in central areas, demand for our sites in Zone 4 has escalated, as potential customers looking to get on the property ladder are happy to migrate to sites a little further out of town. For instance, Our 243 Ealing Road development in Alperton, Brent, is approximately 10 minutes' walk from the tube, and we have sold over 100 apartments off-plan in the last seven months.
What is shared ownership and how does it work? Shared ownership is a fantastic scheme for hardworking people to get a home of their own. People who buy through shared ownership cannot afford to buy a home outright; it may be that they are struggling to save a deposit due to rising rent levels, or can only borrow a limited amount due to insufficient income, or perhaps they are in a relationship that has broken down and they only have a limited capital for a small deposit from the sale of their old home.
Purchasers can buy anything from a 25% to a 75% share of one of our homes. They need a 5% deposit of that share, and must take out a mortgage to cover the percentage of the home that they buy. A subsidised rent is payable to Network Housing Group on the remaining share, plus the monthly service charge if it is an apartment to cover communal maintenance.
As peoples' circumstances change they are then able to staircase up to purchase a larger share of their home leading to eventual full ownership.(Here' is more on Staircasing.)
Why should more buyers consider buying into a shared ownership property? Shared ownership gives buyers an opportunity to invest into their home. A part purchase is easier than trying to buy 100% from the start. Increasingly, our buyers are professional people who just need some extra help.
Shared ownership often makes good financial sense. To give you an example, a purchaser recently bought a 35% share of an apartment in Mandeville Place, Ealing for a cost of £73,325 (it had a market value of £209,500). She needed a 5% deposit of just £3,666. Her mortgage repayments and subsidised monthly rent payments together with the monthly service charge worked out cheaper than the monthly rent at her previous privately rented property.
What's more, buying a newly built home comes with the advantage that everything is ready - it's a hassle-free move.
Who qualifies for shared ownership? There are some conditions to purchasing a shared ownership home. Buyers have to be a UK citizen (or have indefinite leave to remain in the country), and they must have a household income of no more than £66,000 for a one- or two-bedroom property, or £80,000 for a three-bedroom property. Finally, the property must be the purchaser's only residence.
Buyers have to undergo a financial assessment and they also have to meet individual eligibility requirements, which may vary borough to borough.
Certainly, buyers need to demonstrate that they have enough saved to cover the deposit and cover the legal fees, too. It goes without saying that a good credit history is essential.
How much does a property by Network Housing Group typically cost to buy? Currently, prices for our shared ownership apartments in Hertfordshire range from £190,000 for a one-bedroom apartment and £240,000 for a two-bedroom apartment, but of course you can buy from as little as a 25% share which works out as £47,500 and £60,000 respectively.
However, our shared ownership apartments at Macaulay Walk in Clapham - an exclusive redevelopment of a lovely old building that was once an optical works - start at £480,000 for a one-bedroom apartment, i.e. £120,000 for a 25% share.
What is Network Housing Group's USP? Network Housing Group is a well-established and highly respected housing organisation. This year we celebrate our 40th birthday!
As a member of the G15 group of London's largest housing associations, Network Housing Group owns and manages approximately 20,000 homes across London, Hertfordshire and the South East. Network Living is the commercial arm of Network Housing Group. It is currently developing over 1,000 new homes a year and profits are ploughed back into social housing.
Network Living offers a full range of sale products including outright sale, shared ownership, fixed equity and rent to buy. We have just launched a new collection of apartments for private sale at The Junction SW9 in Stockwell. It's a great scheme right next to a conservation area and prices range from £414,950 for a one-bedroom apartment to £534,950 for two-bedrooms.
Which of the developments Network Living is currently offering do you think stands the best chance of winning a WhatHouse? Award? We are extremely proud of our Langhorne Place development in Dollis Hill. Not only is it is set in the most amazing location atop Dollis Hill with incredible views over London but it was one of the first to be funded through the London Mayor's Housing Covenant, and was officially opened by Deputy Mayor for Housing, Richard Blakeway in December 2013.