New Malden, Barking and Harringay are all being included in plans for a new high speed orbital railway connecting London’s zone three suburbs, it has been revealed.
London mayor Boris Johnson revealed the scheme in his London Infrastructure 2050 plan and predicted more people moving to the east of the capital, suggesting that Barking would become “the next Piccadilly Circus within 100 years time”.
He said about £200bn of spending on transport infrastructure alone would be needed in the capital by 2050 to keep the city moving.
It follows the success of the London Underground, which has helped regenerate areas. But where the Overground connects zone two, the orbital railway will link suburbs in zones three and four – even zone five.
Mr Johnson launched his plan, describing it as “a real wake-up call to the stark needs that face London over the next half century”.
He said: “Without a long-term plan for investment and the political will to implement it, this city will falter. Londoners need to know they will get the homes, water, energy, schools, transport, digital connectivity and better quality of life that they expect.”
About Barking, he said: “This will be Piccadilly Circus here in 100 years’ time.
“Transport infrastructure makes all the difference to the prospects of a community.”
And he reckons 50,000 new homes will need to be built in the capital to meet the needs of Londoners.
He said: “Population growth is unstoppable. You’ve got to go with the grain of how people want to live their lives.
“If they want to live in the greatest city in the world, there’s no point in trying to fight them off with a pitchfork.”
1. Three bedroom semi-detached house in New Malden for £475,000.
2. Five bedroom end of terrace house in Barking for £460,000.
3. Three bedroom terrace house in Harringay for £629,950.
Nearly 40,000 people have received assistance to buy a property through the Government’s Help to Buy scheme, figures showed today.
A total of 39,868 people have bought a home in England through the scheme since it was first launched in April last year.
The majority of people who benefitted from the scheme were first-time buyers, with these accounting for 85 per cent of the total, according to Government figures.
Around 27,167 people bought a home through the equity loan part of the scheme during the 15 months to the end of June.
A further 5,388 households took advantage of the NewBuy scheme and 7,313 used the mortgage guarantee scheme.
Despite criticism that the cap on the value of a property that could be bought through the scheme was too high at £600,000, the average person using Help to Buy bought a home valued at just £207,967, with 58 per cent of homes costing less than £200,000.
Around half of people who took advantage of the scheme had a household income of £40,000 a year or less, although 3 per cent earned more than £100,000.
Today’s figures also help to counter arguments that scheme has contributed to runaway house prices in London, where the typical cost of a home rose by 16.4 per cent during the year to the end of June.
But only 6 per cent of properties bought through the equity loan scheme, the biggest part of Help to Buy, were in the capital.
Meanwhile, the NewBuy scheme helped people in areas with large commuter populations, such as Bedford, Milton Keynes, Aylesbury Vale and South Oxfordshire, as well as Thurrock, Bexley, Bromley and Dartford.
People in the centres of major cities, such as Leeds, Birmingham, Coventry, Liverpool and Newcastle-upon-Tyne also benefitted.
The Help to Buy scheme enables people buying their first home or trading up the property ladder to purchase a property worth up to £600,000 with a deposit of just 5 per cent.
The Government will then either top up the 5 per cent deposit with 20 per cent of the property’s value, known as an equity loan, or it will offer lenders advancing high loan-to-value mortgages a guarantee on a portion of the debt.
David Newnes, director of Your Move and Reeds Rains owned by LSL Property Services, said: “Help to Buy has boosted confidence and with it demand among first-timers who have been carefully saving up for their deposit.
“Lenders have been more willing to lend to higher loan-to-value borrowers.
“It’s still crucial that the Government continues to support those aspiring homeowners who don’t necessarily have the financial support from parents or other family members for their deposit.”
The Government said Help to Buy had also helped to boost the supply of new homes, with around 32,500 families buying a new build property through the scheme.
Housing and Planning Minister Brandon Lewis said: “It’s no accident that since the start of the scheme private housebuilding has shot up by a third and continues to climb.
“Developers are increasing their output, and taking on new workers at the fastest rate since records began.”
He added that house building was now at its highest level since 2007, with developers pledging to use the momentum created by Help to Buy to continue increasing their output.
The housing market showed further signs of cooling during July with property prices edging ahead by just 0.1 per cent, figures showed today.
The growth, which was the lowest monthly increase since April 2013, left the typical home costing £188,949, according to Nationwide Building Society.
There was also a slowdown in the annual rate at which house prices are rising, with this easing to 10.6 per cent in July, down from 11.8 per cent in June.
Robert Gardner, Nationwide’s chief economist, said: “Although UK house prices recorded their fifteenth successive monthly increase in July, the pace of growth slowed.
“The slowdown was not entirely unexpected, given mounting evidence of a moderation in activity in recent months.”
Mortgage approvals for house purchase fell by nearly 20 per cent between January and May, while estate agents have also reported a drop in enquiries from potential buyers.
Gardner said at least some of the slowdown in housing market activity could be attributed to the introduction of the Mortgage Market Review in April, which requires lenders to impose tougher lending criteria.
But figures released earlier this week by the Bank of England showed a rebound in mortgage activity during June, suggesting some of the impact of the MMR was temporary.
Gardner said: “With the labour market strengthening, mortgage rates expected to remain low and consumer confidence rising, activity is likely to recover in the months ahead.”
But he added that over the longer term, house price growth would depend on the supply of new homes.
He said that while construction activity was picking up, the rate at which new properties were being built still remains far below estimates of what was needed to meet rising demand.
Today’s data provides further evidence that the housing market recovery may be beginning to slow down.
The Land Registry recently reported that house price growth in England and Wales stalled during June, with property values falling in seven regions of the country.
At the same time, both the Royal Institution of Chartered Surveyors and the National Association of Estate Agents have said more homes are coming on to the market, easing the imbalance between supply and demand.
Potential buyers are also reported to have become more cautious in the face of higher house prices and concerns about when interest rates will start rising.
Meanwhile, Nationwide estimates that Stamp Duty revenues reached £10bn in the 12 months to the end of June, close to the record highs recorded in 2007/2008.
The group estimates that 42 per cent of the total, or £2.15bn, came from homes bought in London, despite the fact that transactions in the capital account for just 15 per cent of all sales.
But at the other end of the scale, homeowners in the North collectively paid just £69m in Stamp Duty, while those in Wales paid only slightly more at £70m.
If you’re a first time buyer, you may be feeling a little overwhelmed by the sheer volume of decisions required to take the first step onto the property ladder. One of the first choices you’ll undoubtedly need to make is about finance. But which mortgage should you choose?
As a first-time buyer, it is unlikely that you’re a cash buyer and so you will need to arrange finance to make your purchase.
There are hundreds of different mortgage products to choose from, depending on factors such as the size of your deposit and how much you can afford to pay out each month on your mortgage repayments.
It is not just a question of choosing the cheapest rate (although this is a big factor), which is why it is worth speaking to a mortgage broker.
Jonathan Harris, director of mortgage broker Anderson Harris, says: “There is more choice of mortgages at higher loan-to-values for first-time buyers than at any time in the past several years, but the new mortgage market rules have added a level of difficulty.
“Lending criteria are stricter with lenders checking you can afford your mortgage both now, and when interest rates rise. To make matters more confusing, lenders have interpreted the new guidelines in different ways so using an independent mortgage broker will help you navigate this minefield.”
Here are a few suggestions of mortgages for first time buyers from mortgage brokers Anderson Harris:
- Mortgage deal for a first-time buyer couple with a 25 per cent deposit and earning a joint salary of around £90,000. For a property with a purchase price of £360,000 and a loan of £270,000, we would recommend a two-year fix with Chelsea Building Society at 2.69 per cent with a fee of £345.
- Mortgage deal suggestion for a first time buyer looking to use Help to Buy as they only have a 5 per cent deposit and a single salary of £35,000. For a purchase price of £140,000 and a loan of £133,000, a two-year fix with Lloyds Bank at 3.98 per cent and no arrangement fee.
- Mortgage deal suggestion for a first time buyer looking to buy with the help of the Bank of Mum and Dad as guarantors. Most lenders will shy away from guarantors, with only a very small handful of small building societies now providing them. Halifax has the cheapest HTB 95 per cent deals on the market and is flexible with applicants who have just started in a new job, perfect for the recent graduate moving to new city for a job and getting a deposit from Mum and Dad. Its two year fixed rate has a rate of 5.19 per cent.
Mortgage lending looks set to rise above £200bn this year but the housing market will slow down in 2015, a lending body predicted today.
Home loan advances look set to total £208bn in 2014, the highest level since 2008, according to the Council of Mortgage Lenders.
The group said it had revised up its previous forecast of £195bn after housing market activity in the early part of the year had been stronger than it previously expected.
It has forecast a further rise in lending 2015, with total advanced reaching £220bn by the end of the year.
But it warned that it expected a combination of affordability pressures, reinforced by higher interest rates, and tougher mortgage lending regulations to lead to a slowdown in housing market activity next year.
Bob Pannell, CML chief economist, said: “While there has been a strong year-on-year recovery this year, we are mindful that house prices were already elevated relative to earnings when the current revival took hold.
“With house price inflation outstripping income growth across large parts of the country, and interest rises in prospect, it seems feasible that household demand may start to fade as affordability pressures intensify.”
He added that for some time the CML had been less optimistic than some public bodies, such as the Office for Budget Responsibility and the Bank of England, that housing market activity would return to its longer-term level of 1.4 million to 1.5 million sales a year.
Instead, it is forecasting transaction volumes of 1.23 million this year, the highest level since 2007, before sales levels fall slightly to 1.15 million next year.
Net mortgage advances, which strip out redemptions and repayments are expected to climb to £20bn this year, the highest level since 2008, but still a far cry from advances of £108bn seen in 2007.
The CML said that while better mortgage availability had supported the recovery in demand during the past two years, there were signs that this source of stimulus may now be coming to an end as lenders approached the limits of their risk appetite in terms of maximum loan-to-value and loan-to-income ratios.
At the same time, the introduction of tighter lending criteria under the Mortgage Market Review and the recent measures announced by the Financial Policy Committee are also likely to lead to a more conservative risk appetite among lenders.
The CML also warned that several years of improving mortgage arrears and home repossessions may be coming to an end, as rising interest rates add to the financial pressure some households are under.
It is predicting that the number of people who are in arrears of at least 2.5 per cent of their outstanding loan will fall to 135,000 this year, before rising to 145,000 in 2015.
Repossessions are expected to follow a similar pattern, dropping to 25,000 this year, then increase to 28,000 in 2015.
But Pannell said: “Given the favourable jobs markets, it seems reasonable to think that the majority of households will cope well with initial gentle rate rises.”