A shared ownership schemes will help people on low to medium incomes own a home with a boost of up to £180 million through the Mayor's First Steps Challenge Fund and £40 million goes to an innovative housing project where buyers need no deposit.
The Fund aims to accelerate the delivery of 4,000 new homes between 2015 and 2020 and is being made available on a recoverable basis so that money can be reinvested to provide more opportunities for affordable home seekers, helping achieve the Mayor's aim of assisting 250,000 Londoners into low cost housing by 2025.
The Mayor is also giving up to £40 million of loan finance to Gentoo's Genie for a new innovative housing product where buyers will need no deposit or mortgage to purchase their home and at the end of the agreement customers own 100% cent of the home outright.
The scheme aims to deliver 2,000 new homes over the next 10 years, helping people who would struggle to save a large deposit for a mortgage.
The Mayor has already made considerable efforts to help Londoners to own their own home with over 50,000 people expected to be helped into home ownership through his First Steps scheme over the course of his two Mayoral terms.
He has also moved to remove red tape and bureaucracy in the application and purchase process, providing greater choice and flexibility for purchasers. Alongside steps to improve the mobility options available to existing purchasers of First Steps homes who need to move for family or employment reasons.
The Mayor made the announcements as he visited Erith Parkin Bexley, a major new regeneration project, with 80% affordable rent and shared ownership homes. The Mayor joined two families who will be moving into shared ownership homes for their first visit to their new homes. He also met one of the residents of the former estate who moved into her new home in December.
The transformation of Erith Park is being delivered by Orbit Group, in partnership with Wates Living Space, London Borough of Bexley and the local community. The Mayor has awarded the project £23 million from his affordable housing funding.
The site was formerly known as the Larner Road estate, which originally had a large number of single occupancy flats and suffered from high crime levels, making it undesirable for many local families.
The first part of the major regeneration project will deliver 343 new homes, including three and four bedroomed family homes with gardens, with a three bedroom shared ownership house costing approximately £240,000.
Erith Park will provide a mix of homes for affordable rent, shared ownership and outright sale and will include 60 of the original households who have chosen to remain in the area. Phase 2 of the scheme will include 244 homes and, subject to planning permission, Orbit anticipates starting on site by March 2015.
‘Shared ownership is crucial in helping the unprecedented numbers of people in London desperate for good quality low cost housing. Families need larger properties and Erith Park is testament to the number of well-designed affordable three bedroom family homes with gardens that can be delivered with good planning, major regeneration and investment,’ said the Mayor Boris Johnson.
‘I want the funding announced today to help thousands more Londoners own homes and create more developments like Erith Park delivering excellent affordable properties,’ he added.
According to Paul Tennant, chief executive of Orbit Group, said that the firm’s research shows that demand for shared ownership homes outstrips supply by 10 to one so there is a clear need for more homes.
Steve Hicks, managing director of Genie, said that there has been a lack of innovation in the housing market which has left would-be home owners feeling frustrated and unable to buy their own house.
‘This 10 year partnership with the GLA will help customers into a minimum of 2,000 new homes in the capital who otherwise would have struggled to own their own homes, because of the difficult market conditions in London,’ he explained.
The First Steps Challenge Fund is part of the £1.45 billion the Mayor has secured from the Government for affordable housing delivery in 2015 to 2018. The money is being made available on a recoverable basis and could take the form of an interest bearing loan or equity investment, to encourage new players to deliver shared ownership homes and greater institutional investment into the tenure.
When the funding is paid back it can be reinvested into delivering more homes. This is part of the Mayor's London Housing Bank initiative to make longer term investment into housing and increase the pace of housing supply.
