London living rent: scheme offers renters without deposits a way to save to buy a home

Homes in the London Living Rent scheme are priced according to average local income, giving tenants more opportunity to save a deposit
Fresh start: Diam Boukeita and her daughters, Nala and Kimya, in their flat in Walthamstow
Christopher Andreou Photography
Ruth Bloomfield12 April 2023

Until the start of this year a huge chunk of Diam Boukeita’s monthly income was going straight out again on rent.

Boukeita, 43, was paying £1,600pcm for a two-bedroom flat in Walthamstow — just over half the take-home pay for her job as a translator.

Fed up with regular rent hikes and the upheaval of moving from one rental to another, her ambition was to buy a home where she and her two daughters, Nala, 12, and Kimya, eight, could settle.

But like so many other Londoners, paying rent and saving for a deposit was proving impossible.

That’s because London’s rental market keeps breaking records. Last month, Foxtons reported that the average central London rent had risen 23 per cent in a year, topping £570 per week for the first time. Meanwhile, Halifax found that the average first-time buyer in the capital puts down a deposit of just over £125,000.

Then Boukeita spotted an intriguing advertisement on Rightmove — a two-bedroom flat at The Chain, Walthamstow, a new development, priced at only £1,262pcm.

On the waterfront: prices of apartments at The Sugar Works start at just over £990pcm for a studio
Handout

“I was very excited because it was exactly the sort of thing I wanted,” said Boukeita. “I couldn’t even believe the price, because around here the market prices are so high.”

Boukeita applied for the flat without much hope of getting it, but after a lot of form filling and a viewing, she was given the flat, which was being rented at a below-market rent as part of the London Living Rent (LLR) scheme designed to help renters without savings get on to the property ladder.

Since 2017 LLR has been helping middle income renters get out of the deposit trap by giving them somewhere to live at below-market rates while they save.

The average rent on a two-bedroom LLR flat is just over £1,000pcm, which works out at around three-quarters London’s median market rent of £1,500pcm.

But rent levels vary around London because they are based on average local incomes (rather than average local rental prices), making them affordable to average earners.

Boukeita is saving more than £300pcm on her rent. And because the flat is much closer to the girls’ school and public transport links than their old place, she has been able to get rid of the family car, saving another £300pcm.

Her plan is to set this money aside so that she can save for a deposit. Scraping together the average £125,000 London deposit by saving £600pcm would take a depressing 17 years. However, the LLR system has a solution: offering renters the chance to buy a share in the property they rent using the shared ownership scheme.

“My aim is to be able to buy at least a 25 per cent share within three years,” said Boukeita.

To be eligible for a LLR flat you have to live or work in the local area already, and be renting from a private landlord (or staying with family or friends because you can’t afford to rent). Your household income must be no more than £60,000, and you must be able to show you are unable to afford to buy a property — including shared ownership — under your own steam.

I couldn’t believe the price... My aim is to be able to buy at least a 25 per cent share within three years

When new LLR homes are advertised Natasha Causon, L&Q’s LLR manager, usually finds herself fielding three or four applicants per home. “It is oversubscribed, but the rental market is saturated over all tenancies,” she said. “I think that people are aware of LLR but it is not as well-known as it could be.”

Successful applicants go through a financial assessment during which an advisor helps tenants work out how much they could save each month — but this element of the scheme is taken on trust. In theory, tenants can spend their disposable income rather than save it. And if they decide they don’t want to buy their flat they can use savings towards a deposit on another property.

Different housing associations have slightly different rules, but L&Q gives initial tenancies of three years, which can be extended to a maximum of 10 years. For Causon, an advantage of the scheme is that it gives renters a chance to get to know their flat and explore the area before committing. “It is a try-before-you-buy thing,” she said.

Six years in, it is hard to gauge whether LLR will really help significant numbers of people buy a first home — no figures on how many people have graduated from renter to owner exist. Causon believes that, as time passes, and tenant savings pots grow, its success will be easier to measure.

“I think we will see a vast amount of it in the next couple of years,” she said.

Affordability zones

More London Living Rent projects

Regeneration zone: L&Q at Lexington Gardens

Live in Nine Elms at the edge of Zone 1 in flats priced at £1,300pcm for a one-bedroom property or £1,375pcm for a two-bedroom flat.

London village: St John’s Road, Isleworth

For access to the River Thames and plenty of green space (Kew Gardens and Osterley Park are both up the road), Isleworth is a great choice. Prices for LLR flats at St John’s Road start at £998pcm for a one-bedroom flat, and £1,097pcm for a two-bedroom apartment.

On the waterfront: L&Q at The Sugar Works

Prices at these modern apartments set between Royal Victoria Dock and the River Thames start at just over £990pcm for a studio. There are also three-bedroom flats available from £1,344pcm.

Coming soon

In the spotlight: Macfarlane Place, White City

A collection of LLR homes at the site of the former BBC Television Centre will come up for rent at the start of 2024 with housing association Peabody.

Go east: L&Q at Beam Park

Later this year a range of LLR flats will go on sale at this development between Dagenham and Rainham.

For information about LLR properties in your area see: london.gov.uk/programmes-strategies/housing-and-land/homes-londoners/search

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