In May 2022, Mayor Sadiq Khan launched London Living Rent, an affordable housing scheme to assist middle-income Londoners onto the property ladder. But 2 yrs on, are any properties on the market?
Promising below-market rents and also the chance to buy your rental home, London Living Rent is definitely an optimistic project that aims to tackle rising house prices.
But you may have to wait a little longer to really benefit. Currently, the Mayor of London's 'Homes for Londoners' search portal – a hub for reasonable housing in the city – has just one listing for properties available through London Living Rent: a yet-to-be-built rise in Merton.
So, is London Living Rent a realistic option? And just what are the alternatives for Londoners who can not afford to buy within the expensive capital?
What is Rent to Buy?
London Living Rent shares many features with Rent to Buy – a government initiative targeted at helping renters become homeowners.
Rent to Buy schemes offer lower-than-market rents, and provide tenants the chance to buy their rental home, or a be part of it, at a later date.
The theory is the fact that lower rental payments will help tenants save for a deposit, which many struggle with in the pricey London property market.
The scheme operates by local Assistance to Buy agents, which let users look for Rent to purchase properties within their region.
Through our own searches, we could only find a small number of property listings across England (where Rent to purchase operates). Most of them were in the North East and Yorkshire and also the Humber.
London Living Rent: how it works
With skyrocketing rents and also the priciest property prices in the country, London Living Rent is really a natural fit for the city.
To be eligible for the scheme, you have to:
Rents are positioned at one-third of each local authority's average earnings, based on ONS data, adjusted for that number of bedrooms. Based on City Hall, this is a 'significant discount to the market level rent' in many boroughs.
While many London renters within this income bracket can buy shared ownership properties, London Living Rent gives a leg up to people who can not afford them.
Yet as the scheme is currently active, the London Living Rent website predicts nearly all homes won’t be accessible until 2022.
According to the Mayor of London's Homes for Londoners search portal, only one rise in Merton happens to be offering it. Which is listed as 'coming soon'.
Wandle, the housing association behind the expansion, told Which? that the complex will include eight homes – seven of which would be available through London Living Rent (the other will be sold under shared ownership). They expect building work to be completed in June.
More London Living Rent homes are now being built
Though scarce at the moment, the Mayor of London’s office assured Which? more new-build London Living Rent homes are on the way.
This was supported by a number of housing associations we spoke to.
A spokesperson for that Mayor based in london told us: ‘London Living Rent is a new sort of affordable home that was introduced through the Mayor's funding programme.
‘The very first homes started to be built two years ago, and in that first year 569 new London Living Rent homes got underway. These new homes and those in following years take some time to become completed and let to tenants, and Sadiq has always been honest that creating a difference will take time.'
While the new homes won' doubt make a difference, two housing associations who previously completed London Living Rent projects told Which? that demand far outstripped supply.
Lukman Ahmed, PRS and commercial director at L&Q, told us that 1,000 people applied for the 243 homes they currently let with the scheme. Ahmed also asserted L&Q has around 300 more units earmarked for London Living Rent later on.
David Gooch, executive director of development at Network Homes, told us it had over 2,000 applicants for that 23 London Living Rent properties it launched in Harrow in 2022, which is incorporated in the final stages of completing some more in Hounslow.
It seems then, that London Living Rent is still picking up steam. But much more homes will need to be implemented to look after everyone who applies.
What are the options for affordable housing working in london?
Fortunately for those who can’t take advantage of London Living Rent homes at this time, there are more choices for affordable housing in the city.
London Help to Buy
London Assistance to Buy is a government scheme that lets homebuyers in Greater London apply for an equity loan of up to 40% of a property’s value.
It’s open to first-time buyers looking to transfer to a new-build property worth less than lb600,000. You’ll need to save 5% from the deposit yourself.
The equity loan allows you to take out a home loan at 55% of the property value, potentially enabling you to borrow more at a lower rate of interest.
However, remember that after five years, you’ll need to either repay the equity loan, or start paying interest.
While London Living Rent homes might be few in number, Homes for Londoners lists hundreds of properties available under shared ownership over the city.
With shared ownership, you buy between 25% and 75% of the property from the housing association and pay rent as high as 3% on the rest.
To purchase your share, you can obtain a mortgage.
Currently, you can buy a 25% be part of a one-bedroom apartment in Hackney for lb107,500. If you took out a 95% mortgage to pay for the rest, you'd need lb5,375 in deposit.
In contrast, a 95% mortgage to pay for the full price would need a deposit of lb21,500.
That being said, it can be hard to obtain a shared ownership mortgage. And you will have to make sure you can afford to pay the combined total of rent and monthly home loan repayments, in addition to any service charges.
Read our guide for more how shared ownership works, or watch our short video for any brief overview:
London Affordable Rent
Designed for low-income households, London Affordable Rent homes are let at a maximum of 80% of local market rents, with service charges included. The higher London Authority (GLA) benchmarks the maximum level these rents can be.
The weekly rent maximums for this year are available in this table:
|Bedsit and one bedroom||lb155.13|
|Six or more bedrooms||lb200.73|
Since London Affordable Rent homes really are a kind of social housing, you’ll need to apply through your local borough.
Social and council housing
If you’re unable to afford anywhere to live, you might be eligible for a social housing.
The mayor recently revealed that in 2022-19, City Hall started building the highest quantity of London council homes in 34 years, and much more homes than in the past at social rent levels.
However, you'll have to put your name on your local borough's waiting list to apply. On top of this, many boroughs have strict eligibility criteria to decide how you can allocate these homes.
After you’ve lived within the property for a number of years, you may become eligible for To Buy, allowing you to purchase your home.
Get personalised suggestions about saving for your first home
If you’re looking to purchase an inexpensive property in London, or anywhere else in the country, an independent mortgage broker will help you get the best mortgage for your circumstances.
They may also be in a position to advise you while you are saving, and point you in direction of schemes that could help.