As the property market heats up in Croydon, we discuss the various ways in which first time buyers are coping with increasing house prices in the area
In April we were delighted to hold our very first FTB Home Show in Croydon, away from our usual spot in central London. Croydon is well known as a very up-and-coming London borough, which, over the years, has experienced a big lift in house prices, thanks to the ongoing regeneration of the area. With over £50m of investment planned over the next 20 years, in addition to excellent infrastructure already in place and train services into central London in under 20 minutes, Croydon is fast becoming a property hotspot. Added to this, with plans for shopping centre giant Westfield to come to town in 2020, Croydon’s house prices are only going to continue in the same direction.
So, it won’t surprise anyone to hear that the show was a storming success, with over 1,500 first time buyers turning up, all trying to find ways to cash in on Croydon’s booming market. Even local MP for Croydon Central, Gavin Barwell, very kindly agreed to attend the event to show his support for local first time buyers aspiring to purchase in the area. Hosting one of the seminars, it was interesting to listen to the other side of the story, with the big question being about local buyers who feel they will ultimately be priced out of their own market. Whilst gentrification of an area is great for businesses, the economy and existing homeowners, what does this mean for local first time buyers who feel that they are going to be priced out of their home area?
Mr Barwell said, “It’s fantastic that Croydon is emerging as a vibrant and highly successful destination, not just as a London borough but also at an international level. A side effect of this is a significant lift in local house prices, as more people invest in the area and move to benefit from the resulting job creation. This uplift in house prices will be welcome news for homeowners in Croydon, but, unfortunately, makes it harder for local people to get on to the housing ladder.”
In order to try and offer advice to local first time buyers in the area, Mr Barwell discussed some of the various ways in which people can make more affordable choices when buying a home, especially highlighting the success of Help to Buy – the government-funded equity loan scheme, which only requires a 5% deposit.
He continued, “Help to Buy has been a tremendous success right across the country and has also helped nearly 200 buyers in Croydon. The Government’s equity loan scheme allows buyers to get on to the ladder with a much lower deposit, while at the same time, gaining access to more affordable interest rates. Alternative options include shared ownership and there are other homeownership schemes in the pipeline too.
“The key is to ensure that we are building enough properties to keep up with demand as this will help mean that house prices don’t spiral out of control.”
Mr Barwell praised the success of the First Time Buyer Home Show and thanked the team for hosting its first event in Croydon.
He added, “The event was a very busy one and clearly demonstrated the need for hard-working local people and families to find out what’s available to them. Having bought my own house in Croydon at the age of 25, I understand the desire to own a place of your own and I will be doing everything I can to help the next generation have the same opportunities that I had.”
At the show, we spoke to some of the first time buyers who attended, to find out what they thought about getting on the housing ladder in Croydon.
Local first time buyers
Rianne Foster, 24, and James Sexton, 23, from Croydon, both live with their parents locally as they continue to save for their first home. Through attending the show, they were delighted to find out about both the Help to Buy: ISA – a scheme where their savings will be matched by the Government – and also the Help to Buy equity loan scheme, whereby they can buy a new home with just a 5% deposit.
Rianne said, “Obviously it’s great to see Croydon continue to get better, but we are quite anxious to buy our first home as we watch house prices keep going up. We’re at the show to find out a way we can get on to the property ladder sooner rather than later, as we are concerned that when Westfield arrives, we won’t be able to afford to buy at all.
“We’re definitely going to sign up for the Help to Buy: ISA as we continue to save by living at our parent’s houses. It would be silly not to take advantage of the saving plan, which is essentially free money available to us. Then we are going to try and find out where we can use the Help the Buy equity loan scheme which means we only need a 5% deposit. We reckon we are about two years away from buying our first home and, hopefully, we can get in just before we are priced out of the local market.”
Priced out of their own area
Francois Onawelho–Loren, 42, and Wioleta Kowalska, 32, are currently renting a property in northeast London. Priced out of their own local housing market, they are looking at Croydon as a more affordable way of getting on to the property ladder.
Francois commented, “We’ve been saving for a couple of years but there’s no way we could afford to buy anything in our local area. Croydon really interests us as the transport links are so fast into London and the house prices still seem relatively affordable – and we hope to benefit from any house price increase.
“Coming to the show has made us realise, for the first time, that we really can afford to buy our first home now and, by looking a little further afield, we now know that with Help to Buy, we can even buy a two bedroom property. We can’t wait to buy.”
Moving home to save
Currently renting, Rosie Grew, 25, and Gary Penfold, 25, are living in a house share in Earlsfield, southwest London. They plan to move in with Rosie’s parents close to Croydon while they save to buy a place of their own.
Rosie said, “Croydon definitely appeals to us as a location as our money will go a lot further here and there is hopefully an opportunity to benefit from the increase in house prices. The transport links are also fantastic, so we can only see us buying here to be a good thing. We hope to buy somewhere before the end of the year, after we’ve saved some more by living with my parents, and we really can’t wait to invest in our own four walls.”