New build homes in London up to £350,000 are to be open to British buyers only for three months before they can be marketed overseas in an historic new deal struck by the city’s Mayor.
As part of the deal for the first month that a property is on sale it will only be available to people who live or work in London and it has the backing of home builders and housing associations.
Mayor Sadiq Khan struck the deal with the Home Builders Federation (HBF) and g15 which represents London’s largest housing associations and it is also backed by the city’s biggest home builder Berkeley Homes.
It is an unique offer, the first time ever that sales from leading home builders have been restricted to UK and London buyers only.
The deal follows research the Mayor commissioned last year into the role of overseas investment in London’s property market which found that half of new properties bought by overseas buyers in London were homes under £500,000, typically the price range for many first time buyers and those looking to access support through schemes such as Help to Buy.
‘I am determined we take meaningful steps to help Londoners buy more new homes they can afford, and the offer from across the housing industry will mean we can move quickly to make this a reality for our city,’ said Khan.
‘Through the extensive research I commissioned, I was alarmed to discover that overseas buyers were focusing to such an extent on the lower cost end of new build homes many of which were being sold long before Londoners even knew they were available,’ he pointed out.
‘That is why I have been discussing steps with the capital’s leading home builders and I welcome their landmark offer to give Londoners first dibs for up to a month on all their new homes under £350,000, with sales ring fenced to UK buyers for three months before they are marketed overseas,’ he explained.
‘The industry offer is an important breakthrough. I will now work with them to put it into practice, whilst also being clear we need the Government to help us go further, for instance by guaranteeing extended mortgage offers to put London’s first time buyers on a level playing field with investors,’ he added.
Khan will now work with homebuilders to put their offer into action, including by potentially making homes available through his new Homes for Londoners portal, currently under development on the City Hall website.
By working with the voluntary offer, which is expected to expand to cover more home builders and housing associations in the near future, the Mayor aims to have the offer up and running later this year, many years ahead of any measures that could be secured through the planning system.
The Mayor’s draft London Plan, published at the end of 2017, referenced his discussions with major home builders to make more new homes available to Londoners before anyone else. The draft plan sets out his intention to keep any such steps under review to ensure they deliver his objectives, with a commitment to monitor their effectiveness and to consider other measures if necessary.
The Mayor has also been clear that whilst offering homes to Londoners first is an essential step toward helping them buy more new homes built in the capital, Ministers need to tackle other barriers for first time buyers in the capital’s housing market too.
Sadiq wrote to the Chancellor, Philip Hammond, in October last year, urging the Government to work with City Hall and mortgage lenders to introduce a guarantee for mortgage offers up to 24 months on new homes, an attempt to create a more level playing field between London’s first-time buyers and cash buyers and investors, whilst also providing additional security and confidence for home builders.
‘As an open and thriving world city, London is hugely attractive to foreign investors. Although this has had many benefits in recent years, it’s also made it increasingly difficult for Londoners to compete in what has become a global housing market in our own capital city,’ said Paul Hackett, chair of g15.
‘As London’s largest housing associations we recognise the importance of prioritising ordinary Londoners, who otherwise would find it much harder to buy a home in the city in which they live and work,’ he added.
According to Stewart Baseley, executive chairman of the HBF, house builders are committed to helping Londoners realise their ambition of buying a home in the capital. ‘London is a world city which presents a huge challenge for people wanting to purchase a property. The protocol will ensure UK based buyers are at the front of the queue and are first to get the opportunity to find and buy new homes being built,’ he added.
