For many young people, the dream of owning a home in the UK has become unattainable. Property prices have risen from £72,000 in 1998 to £227,000 in 2018 on average throughout the UK, a figure that is even higher in London, where average prices have risen from £104,000 to £479,837 in the same period. To counter this growth, and to encourage young people to get into the property market, the government has introduced the Help to Buy scheme, offering a loan to first time homebuyers.
This scheme gives young people the opportunity to purchase their first home with a 5% deposit, lends them up to 20% of the amount (or 40% in London) and charges no interest for the first 5 years. This loan is to be paid off after 25 years or when the house is sold, depending on which comes first. For those utilising this scheme, many of whom are young professionals working in the city, purchasing in emerging areas of London where they can get the greatest value for their money, while still being accessible from the employment hubs of Central London is the wisest choice.
As the London property market has boomed, savvy buyers and renters have sought out pockets of value where they can pay less for housing while still being able to easily access employment hubs in central London. Woolwich in south-east London is a prime example of this phenomenon.
In the 15 years that I have worked in the area of East/South East London, I have seen firsthand the growth and development that has occurred in the Woolwich area and its relationship to London as a whole. Woolwich has risen from the period of stagnation that it experienced following the closure of key industries in the 1970s and 1980s and is now an up and coming area that young professionals are moving to, priced out of central London.
The local council has enacted measures to make this move very attractive, investing in the infrastructure and facilities of the local area. This has included a £31 million cultural district, featuring a 1200-seat auditorium, performance courtyard and black box theatre, redeveloping areas of the town centre to provide services such as shops and offices and the rejuvenation of local Grade I and II* listed buildings.
By enabling young people to purchase their first property by creating the affordable home ownership schemes, the government is opening up new areas of possibility within the competitive London property market. This has made the dream of purchasing a first home attainable again for young people and is good from the UK property market as a whole as it injects new capital into a constantly growing industry.