London house buyers camp overnight for chance to buy £199,000 studio

05/11/2015
People were camping out in the street in the early hours of Thursday morning – some since the day before – to be first in line to purchase studio flats in a west London complex for £199,000. The flats, based in the former UK headquarters of American Airlines, will not be ready to move into until the autumn of 2017.

The developer, Galliard, is selling 228 flats, starting at £199,000 for a 28 sq metre (301 sq ft) “studio suite” up to £355,000 for a one-bedroom apartment, on a first-come, first-served basis. Because they are being built under government rules allowing a change of use from offices to residential, Galliard has not had to provide any social housing on the site. However, with more than 40% of the flats priced below £250,000, they are more affordable than many new-builds in London, and below the average house price for Hounslow, which is currently £383,500.
The development has been advertised heavily in the local press, where would-be purchasers were told buyers of similar apartments in the area “see resale values soar by up to 14% growth in 10 months”.
Monika, 38, an accountant from Poland, had been waiting in the queue since 10am on Wednesday. Her mother and brothers had been helping her by sitting in shifts outside the imposing Trinity Square building. “We were thinking about buying one of the company’s flats in Hayes,” said Monika, who has lived in the capital for 15 years. “I remember I came two hours after the doors opened there and 75% of the flats were already sold so we decided to come really early for this one.
“We don’t know if there will be only one flat at £199,000 so just in case I wanted to be first in the queue. In Poland, like here, we are good at queuing so it’s OK. Buying property is quite a high return and you can be sure the mortgage is paid. I’m thinking about my retirement. I believe after 20 years, I’ll have a good income, so I can retire.”
Shelinder Singh, 25, a business manager from Hounslow, had been in the queue since 5pm. He is a first-time buyer and the studio flat, if he secures it, will be the first home for him and his wife, who have been renting since they married in 2013. “I’m going for the cheapest one as it’s my first time buying property, so I have to go for the one that is as cheap as possible,” Singh said.
The doors opened at 5pm on Thursday to the potential buyers, who will have to pay a £2,000 reservation fee for the flat. After 21 days, they will have to pay 10% of the price, followed by a further 10% nine months later. The remainder is due on the day of completion in autumn 2017.
“I never thought I’d be able to buy anything as cheap as that in London,” said Singh. “You can’t find anything in this area for less than £350,000. I’m really excited about living somewhere I actually own.”
By lunchtime on Thursday, more buyers had joined the queue, the majority of them investors who were keen to buy as cheaply as possible. Word was spreading that only one flat was available at £199,000, meaning many were set to be disappointed.
Dinesh Kumar was queueing outside a Galliard development for the second time this year, after buying another property in Canary Wharf. “In the beginning we heard there were six flats for £199,000, then four, and now there is only one,” he said. “People have no idea what they’re going to get. I called them two weeks ago but they said they didn’t have the prices.”
Kumar said he had been told to arrive early to queue as a lot of people were expected. “I think that it’s all for show – telling people there is a queue here, there is demand here, means they can get through the next plans. If you pay any more than £250,000 for a studio, that’s going to be too high and taking a huge amount of risk.”
Shawn Wang spotted the banner for the flats when going to a meeting and came back to queue on Thursday morning. He was 21st in the queue and looked surprised that there might be only one flat available for £199,000. He currently lives in Reading, but said he might end up moving to the property when it was finished. “£199,000 is a very good price,” he said. “If I get in and there is one available for £199,000, I’m going to buy it straight away; if it is £235,000, I’ll have to think about it.”
One buyer had come from France to try to secure a deal before catching the Eurostar home. Laurent Eschenlohr said he loved London and was keen to move here eventually, but may rent out the property initially. He admitted he had never heard of Hounslow before, “but I think it will be a great area”.
As the rain started pouring, Galliard staff brought out umbrellas to the waiting crowd and reminded them that they had to hand them back before they went home, before letting them shelter inside the complex. Sales director David Galman said he expected to have sold more than 100 flats by the end of the day. He confirmed that there was initially only one available at the advertised price of £199,000, but added that a couple more might go for the same cost.
An analysis of official figures earlier this week found that the average UK home costs more than 10 times the annual median income of full-time workers. The situation is only slightly better with first-time buyer homes, which cost almost eight times the median income.
Properties in the UK are currently valued at an average of £284,000 by the Office for National Statistics, while first-time buyers typically pay £215,000 to climb on to the property ladder. By contrast, the median gross annual earnings for full-time employees is £27,200.

By:http://www.theguardian.com/money/2015/nov/05/homebuyers-camp-out-overnight-for-chance-to-buy-affordable-flat

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