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London, Pockets of Affordability

 

Pocket homes under construction on the China Walk estate in Lambeth.

The China Walk estate was built by the London County Council between 1928 and 1934. Today, an extra 70 units are being fitted into two spaces – a former car park and a garage space – among its half-dozen interwar blocks, built in Bedford, brought to the capital by truck and assembled on site at speed.

The developer, Pocket Living, which supplies compact one-bedroom housing for what it calls “city makers” – nurses, designers, teachers, engineers and other middle-income Londoners essential to the city – for prices that are least 20% below surrounding market levels. They call them “starter homes” because they’re sold to first-time buyers, but aren’t at this stage starter homes in the controversial government policy sense.

Lambeth will have 126 Pocket Homes by the end of the year or just beyond. The prices of those on China Walk will start from £267,000 and be sold to people with household incomes well below the £66,000 top end of the eligibility range set by the Mayors office. The exact figure has yet to be agreed with Lambeth, but the average Pocket purchasing household earns just up to £40,000 a year.

Will these and other Pocket homes meet Sadiq Khan’s definition of “genuinely affordable”?

There’s some interesting background here. The former Mayor Johnson, through the Greater London Authority (GLA), lent Pocket, which receives no public subsidy, £22m interest-free back in 2013. The GLA and Pocket, along with London’s 33 local authorities, are also connected through Greater London Enterprise (GLE), a body which invests in and supports small businesses.

Murray has said the government’s 20% discounted starter homes, which can cost as much as £450,000 in London, look like struggling to make the “genuinely affordable” grade. However, Pocket’s properties, tailored to income groups who might also qualify for shared ownership homes, which Khan is keen to support, plainly find favour with him.

It doubtless helps that a “restrictive covenant” applies to Pocket homes, meaning, in simple terms, that an owner can only sell on to someone else who meets the eligibility criteria agreed with the council. Pocket tells me this arrangement might need to be varied to some degree in the case of China Walk because the discounts there will be be so large, but that the general principle of a minimum 20% knock down in perpetuity will be maintained. The same does not apply to government starter homes, which can be sold by their initial owners for their full market value after just five years.

 

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