Buy a London flat on a credit card

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%VIRTUAL-SkimlinksPromo%A new Docklands development in east London is offering first-time buyers the chance to secure a £250,000 apartment with a deposit of just £2,000 - or 0.8% of the purchase price.

It's the sort of downpayment that could be made using a credit card, and that has prompted fears of a return to the pre-recession days of "easy credit".

Would-be homeowners keen to take advantage of the offer on a flat in the £100 million Royal Gateway scheme in Canning Town, which is yet to be built, will need to attend a three day launch fair at an east London hotel.

With the help of brokers linked to the developers, Galliard Homes, they will then need to find a 10% formal deposit within 20 days.

Critics are worried that the deal will encourage cash-strapped first-time buyers to overstretch themselves.

Green party London Assembly member Darren Johnson told the Evening Standard: "Easy credit was one of the main reasons for the last housing bubble, as it just pushes up prices and makes housing even less affordable.

"The deal might seem great for some buyers, but really they are taking on a huge mortgage which they can't afford when rates rise."

But David Galman, sales director of Galliard Homes, insists that the company will not sell the off-plan flats to people who could not afford them, despite advertising the fair by stating that: "with £2,000 initial deposit you can even exchange on the day".

"If they are struggling to get the 10% together we will not sell to them, that's not in anyone's interests," Galman said.

Prices for flats in the development start at £250,000 for a 550 sq ft one bed flat. That's less than half the price of homes in many new apartment blocks on the Thames, meaning they are likely to appeal to buyers looking for a cheap property.

However, Galman is not worried about those who sign up for the £2,000 deal finding a mortgage.

"During the recession credit and realistic mortgages dried up, but credit has now returned to the housing market in full force this year, and it will enable ordinary Londoners to get onto the housing ladder and purchase their own home," he told the Daily Mail.

Work on the Royal Gateway scheme is due to start later this month, and the plan is for the 336-unit development complete with shops and rooftop gardens to be completed by early 2017.

The sales fair will place at the Crowne Plaze Hotel at the Royal Victoria Dock from 5pm on Friday February 14.
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