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  • FIRST POST
    • Mark1987
    • By Mark1987 9th Jul 17, 11:25 AM
    • 93Posts
    • 1Thanks
    Mark1987
    Help, first time buyer in London with £55k/year
    • #1
    • 9th Jul 17, 11:25 AM
    Help, first time buyer in London with £55k/year 9th Jul 17 at 11:25 AM
    Hi guys!

    I'm a 30yo IT professional guy currently living and working in London (Farringdon).
    My current salary is £55k/year, which could reach £60k in the next 1-2 years, and I could use savings for £140k, no more.

    I am single and at the moment I am renting a 1-bed flat for £1300/month (bills included) so I was thinking to buy something to avoid this big waste of money.

    I am very confused because I am not sure I will stay in London in the next 2-5-10 years but everything can happen, I may change mind. I would like to invest my money to buy something to avoid to pay the rent and to have a profit, when reselling this property in the future. What would you advice me? I don't have any idea where I can start. Should I consider flats or houses with my budget? What is a realistic price for a house I can afford?

    I like west London generally and it's very convenient for IT jobs, in case I will leave my current company.

    Also, do you think it's a good period now to invest in properties?

    Thanks a lot for your help!
    Last edited by Mark1987; 09-07-2017 at 11:30 AM.
Page 2
    • Mark1987
    • By Mark1987 9th Jul 17, 2:50 PM
    • 93 Posts
    • 1 Thanks
    Mark1987
    But what if the tenants aren't as morally minded as you and decide to play hard ball?

    So two months notice turns into however long it takes the courts / bailiffs to get them out.

    There was a huge thread on this board a few months back where the tenant had received notice as husband landlord wanted to move back in - the LL had made a right pigs ear of everything.
    Originally posted by gettingtheresometime
    Yes, I know. It is always a risk renting your property. Especially if they leave the house in a bad state which requires some work to fox it.
    I consider this the last option.
    • Mark1987
    • By Mark1987 9th Jul 17, 2:51 PM
    • 93 Posts
    • 1 Thanks
    Mark1987
    where have you invested the 140k to get 4-5k return?
    Originally posted by economic
    My parents made some investments outside the UK. I don't know exactly what. Do you think I could get more than that with my savings?

    How much should I save each year to keep my savings in line with the house price rise in London?
    • economic
    • By economic 9th Jul 17, 2:54 PM
    • 2,186 Posts
    • 1,185 Thanks
    economic
    My parents made some investments outside the UK. I don't know exactly what. Do you think I could get more than that with my savings?

    How much should I save each year to keep my savings in line with the house price rise in London?
    Originally posted by Mark1987
    i think you need to realise house prices are not guraranteed to go up every year.

    i would just stick some cash in stocks, some in high interest savings, some in p2p. you dont need to put it in anything else really.
    • Mark1987
    • By Mark1987 9th Jul 17, 4:07 PM
    • 93 Posts
    • 1 Thanks
    Mark1987
    In case I don't have doubts about living London and I want to stay what should I start to look at with my budget? Houses around 350k seem to be the best option.
    • SuboJvR
    • By SuboJvR 9th Jul 17, 6:37 PM
    • 459 Posts
    • 325 Thanks
    SuboJvR
    Whilst I appreciate all too well that it is frustrating to be paying high rental costs, I don't think you need to be in any rush. You're doing pretty well; good salary, good savings, scope to save more.

    But you're not sure of where you want to "settle down", granted not everyone makes a plan to stay in the same house for 50 years. Maybe I'm old fashioned but I wanted to try and buy a house that I could see myself staying in, assuming no other drastic life changes. But you're not even sure if you want to stay in London for the next couple of years! Renting gives you flexibility, it puts you in a great position to buy when you feel ready. You could meet the person of your dreams tomorrow and want to settle down and buy a place together, which would get a little complicated. You could end up wanting kids quite soon, and in a house too small to accommodate.

    For £350k in London, I think you'd struggle to find a house. A quick search turns up a few 1 bed flats, a couple of 2 bed properties, but not really any houses, depending on area of course.

    In terms of notice for renting - on a statutory tenancy, the landlord will serve notice. However you don't need to be out at the end of that. If you stay, and continue to pay rent, they must apply to the courts to have you evicted, which probably won't be a high priority for someone who is continuing to pay rent and be a model tenant. So it can take months to get someone out.
    • zagubov
    • By zagubov 9th Jul 17, 7:59 PM
    • 14,953 Posts
    • 127,803 Thanks
    zagubov
    If you think you'll be here for over three years it's worth thinking about buying. Less than that, it's too much hassle and also a gamble.

    If over five, it's definitely worth buying. I'd look further out, from zone 4 outwards. I'd not neglect south of the river.

    If you could afford it, a house would be better than a flat, and a two-bed would mean you could take in a lodger.

    If you meet someone and settle down, you'd be well advised to look at moving from London. The property you get there might not rise in value so much, but many other parts of life could be a lot better.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • agrinnall
    • By agrinnall 9th Jul 17, 8:12 PM
    • 18,781 Posts
    • 14,486 Thanks
    agrinnall
    It is not legal staying in a house if you have to leave after a notice.
    Originally posted by Mark1987
    It's perfectly legal to stay in a rental property after being given notice. The only time it's illegal to stay is after the LL has correctly served notice, waited for that notice to expire, gone to court and won an order to instruct the tenants to leave.

    If you are really considering letting your property I strongly suggest that you brush up on all of the responsibilities of being a LL (and don't think employing a Letting Agent will absolve you of any of these responsibilities, because the law is clear that it's the LL that is responsible).
    • Mark1987
    • By Mark1987 9th Jul 17, 8:46 PM
    • 93 Posts
    • 1 Thanks
    Mark1987
    If you think you'll be here for over three years it's worth thinking about buying. Less than that, it's too much hassle and also a gamble.

    If over five, it's definitely worth buying. I'd look further out, from zone 4 outwards. I'd not neglect south of the river.

    If you could afford it, a house would be better than a flat, and a two-bed would mean you could take in a lodger.

    If you meet someone and settle down, you'd be well advised to look at moving from London. The property you get there might not rise in value so much, but many other parts of life could be a lot better.
    Originally posted by zagubov
    If you think it is worth to buy staying here for the next five years then I could make an effort and stay here, even a bit more than five years. As I said, I am only wondering about my future. It could be possible that I sill stay in London until I am old. We'll see...
    Regarding the area to buy I don't really care about living close to the center and I don't like busy places so I would be more than happy to consider zone 4-5 and south of the river. Any idea? I saw affordable semi detached houses around Staines and Egham but also not far from Hampton, like west Molesey.
    • SuboJvR
    • By SuboJvR 9th Jul 17, 9:14 PM
    • 459 Posts
    • 325 Thanks
    SuboJvR
    If you think it is worth to buy staying here for the next five years then I could make an effort and stay here, even a bit more than five years. As I said, I am only wondering about my future. It could be possible that I sill stay in London until I am old. We'll see...
    Regarding the area to buy I don't really care about living close to the center and I don't like busy places so I would be more than happy to consider zone 4-5 and south of the river. Any idea? I saw affordable semi detached houses around Staines and Egham but also not far from Hampton, like west Molesey.
    Originally posted by Mark1987
    You're talking about two different things now. Living in London is not the same as living in suburbia! The areas you mention are potentially more suited to both working in London, and settling down, so possibly covers both bases in terms of longevity.

    This isn't to say people don't settle down in London of course. But it usually follows what when people start thinking with a family view, they want to move away.

    Staines/Egham are outside of the standard travel card zones, a season ticket would set you back around £2,500 per year at the moment. West Molesey isn't really commutery, but it's near Surbiton which is a big commuter spot (and rather expensive, as a result).

    It depends where exactly your work is in London; think about the routes in. Is Underground a possibility (north west of London has longer tube links). London Waterloo serves most of the south west stations so Surrey onward. Waterloo East, London Bridge and Charing Cross serve more Sussex/Kent side. Paddington out to the West (e.g. Reading etc). And there my knowledge runs out!

    And think about wider issues such as what else may be important to you. For us, that was a garage. Parking.
    • zagubov
    • By zagubov 9th Jul 17, 9:26 PM
    • 14,953 Posts
    • 127,803 Thanks
    zagubov
    Staines, Egham, West Molesey are possibly not in London itself, and some are outside the M25. Probably fine though.

    You need to be comfortable with the commute if it's for five years or more. This needs a lot of research and preparation.

    SuboJvR has covered most of what I planned to say.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • dlmcr
    • By dlmcr 9th Jul 17, 9:48 PM
    • 135 Posts
    • 173 Thanks
    dlmcr
    Living anywhere near London is imho a mugs game nowadays economically and from a quality of life perspective. That job that pays 60k in London you can get further north paying say 40 but the accommodation is degrees cheaper which means that your money left over is much higher.
    By all means go to London for the experience but I cannot imagine wanting to live anywhere near there for 5 years or more taking part in such a rat race life, it's a horrible grind that really take its toll long term and the stress of it takes years off your life.
    If all you want is endless HPI from buying a house in the south east then I would question whether over the next 5 years that would even occur in the same manner as it did in the last 5 years, with the costs involved in buying would you after 5 years be likely to make a profit on what you bought now? I am not so sure but maybe that is a debate for the HPC crowd?
    I cannot understand the obsession with living in the south east of this country, maybe if you are from a different country you cannot understand that there is an economy outside the south east. But hey by all means stay in London or the south east and pay 300k for a 1 bed flat above a kebab shop waking up every day wondering what you are doing with your life, up north we can have a nice 4 bed detached with big garden in a nice area for the same money and the wages are not much less!
    • zagubov
    • By zagubov 9th Jul 17, 10:55 PM
    • 14,953 Posts
    • 127,803 Thanks
    zagubov
    Living anywhere near London is imho a mugs game nowadays economically and from a quality of life perspective. That job that pays 60k in London you can get further north paying say 40 but the accommodation is degrees cheaper which means that your money left over is much higher.
    By all means go to London for the experience but I cannot imagine wanting to live anywhere near there for 5 years or more taking part in such a rat race life, it's a horrible grind that really take its toll long term and the stress of it takes years off your life.
    If all you want is endless HPI from buying a house in the south east then I would question whether over the next 5 years that would even occur in the same manner as it did in the last 5 years, with the costs involved in buying would you after 5 years be likely to make a profit on what you bought now? I am not so sure but maybe that is a debate for the HPC crowd?
    I cannot understand the obsession with living in the south east of this country, maybe if you are from a different country you cannot understand that there is an economy outside the south east. But hey by all means stay in London or the south east and pay 300k for a 1 bed flat above a kebab shop waking up every day wondering what you are doing with your life, up north we can have a nice 4 bed detached with big garden in a nice area for the same money and the wages are not much less!
    Originally posted by dlmcr
    dimcr has a point. The south east is a magnet for migrants from the rest of the UK and the EU and many other places besides.

    It's an easy place to find work.

    It's got a lot of entertainment, not always easy to access due to the scale of the place.

    It's a good place to meet women but not men (according to this).

    It has good transport links with the wider world.

    It's probably not the best place to raise a family, live in a large house with a large garden, send kids to a good school. People from outside the UK sometimes aren't aware of the benefits of the different areas/regions /countries of the UK.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • AFF8879
    • By AFF8879 10th Jul 17, 12:44 AM
    • 268 Posts
    • 659 Thanks
    AFF8879
    Living anywhere near London is imho a mugs game nowadays economically and from a quality of life perspective. That job that pays 60k in London you can get further north paying say 40 but the accommodation is degrees cheaper which means that your money left over is much higher.
    By all means go to London for the experience but I cannot imagine wanting to live anywhere near there for 5 years or more taking part in such a rat race life, it's a horrible grind that really take its toll long term and the stress of it takes years off your life.
    If all you want is endless HPI from buying a house in the south east then I would question whether over the next 5 years that would even occur in the same manner as it did in the last 5 years, with the costs involved in buying would you after 5 years be likely to make a profit on what you bought now? I am not so sure but maybe that is a debate for the HPC crowd?
    I cannot understand the obsession with living in the south east of this country, maybe if you are from a different country you cannot understand that there is an economy outside the south east. But hey by all means stay in London or the south east and pay 300k for a 1 bed flat above a kebab shop waking up every day wondering what you are doing with your life, up north we can have a nice 4 bed detached with big garden in a nice area for the same money and the wages are not much less!
    Originally posted by dlmcr
    Different strokes for different folks. I turned 30 last year and have no plans to leave London at all. Not all houses/flats are as you describe, there's plenty of green space and quiet areas, I bought a place in zone 2 just a couple of stops from the square mile on the tube yet it's quieter and more peaceful than where I grew up in a rural village.

    The "rat race" as you put it can be stressful, but it's also invigorating knowing you're pursuing a career with limitless opportunities (or at least far more than other parts of the country), surrounded by like-minded individuals and endless leisure / entertainment / cultural options right on your doorstep. If I fancy a walk down the south bank past the London Eye, popping into the Tate modern on the way back, I can be there in 20 minutes

    I'm the opposite to you, if I moved out to suburbia I think the boredom would cause me to age rapidly. Don't get me wrong, I love the tranquility of rural areas now and again but even a long weekend back at my parents and I'm itching to get back on the train!
    • Mark1987
    • By Mark1987 10th Jul 17, 8:14 AM
    • 93 Posts
    • 1 Thanks
    Mark1987
    Thanks for all the replies.
    I think the problem is that I didn't understand yet what kind of lifestyle I want so I would like to make short-term plans to be more flexible in case I want to change. I work in IT so the Reading-west London-central London area would be the best for my job that's why I was considering to find something on the west side of Loneon, even outside the M25.
    I don't really mind travelling 1.15h a day each way but probably I wouldn't do more.
    My dream would be living and working in the Brighton area but unfortunately it is not the best place for IT jobs. There is still something though, so I am always keeping an eye on it. For sure I know that I don't want to live in busy area so I don't really care about buying close to the center since I can go there every day after work.
    I think everyone has different lifestyles but my idea is probably closer to dLmcr.
    My biggest fear now is that I am not saving much monet with my rent so in a few years when the house prices will be higher my current deposit will have a lower value than now and I will have more problema to find a decent house.

    Regardin the job, I change company very often because I like to try new things so I don't really see myself in a smaller city in the same company for 10 years. London offers infinite opportunities for this.
    • always_sunny
    • By always_sunny 10th Jul 17, 9:09 AM
    • 3,513 Posts
    • 3,727 Thanks
    always_sunny
    I would buy outside of London with quick links to it. i.e. Milton Keynes > Euston is 30 min.
    If you're a contractor you could even expend the ticket so it makes it even more attractive.
    It depends if you prefer to spend on transport vs mortgage, though if you plan to leave London having a smaller mortgage might be better. Smaller properties tend to yield more if you rent them out.
    Defo, avoid London right now, too unstable!
    Expat with an EU passport
    • leespot
    • By leespot 10th Jul 17, 9:24 AM
    • 542 Posts
    • 436 Thanks
    leespot
    Whatever you do, don't become a landlord.
    • SuboJvR
    • By SuboJvR 10th Jul 17, 9:35 AM
    • 459 Posts
    • 325 Thanks
    SuboJvR
    Living anywhere near London is imho a mugs game nowadays economically and from a quality of life perspective. That job that pays 60k in London you can get further north paying say 40 but the accommodation is degrees cheaper which means that your money left over is much higher.
    By all means go to London for the experience but I cannot imagine wanting to live anywhere near there for 5 years or more taking part in such a rat race life, it's a horrible grind that really take its toll long term and the stress of it takes years off your life.
    If all you want is endless HPI from buying a house in the south east then I would question whether over the next 5 years that would even occur in the same manner as it did in the last 5 years, with the costs involved in buying would you after 5 years be likely to make a profit on what you bought now? I am not so sure but maybe that is a debate for the HPC crowd?
    I cannot understand the obsession with living in the south east of this country, maybe if you are from a different country you cannot understand that there is an economy outside the south east. But hey by all means stay in London or the south east and pay 300k for a 1 bed flat above a kebab shop waking up every day wondering what you are doing with your life, up north we can have a nice 4 bed detached with big garden in a nice area for the same money and the wages are not much less!
    Originally posted by dlmcr
    It wasn't really a choice for me. My family is based in Surrey, and whilst I started my career further north (Yorkshire, then Nottinghamshire), the endgame was always to get to a salary point where we could afford to move back south to be closer to family (and friends, actually).

    I have to say it has been very enlightening being in these forums though and seeing how the house prices differ so much; I knew it to be so when we moved from a 3 bed detached semi with garage paying £650/month in rent to a 2 bed terrace paying £1100/month (landlord should probably be charging us £1200 to keep up with the area, but I digress).

    But, when it all comes down to it, we can make it work down here. There was a time a few years ago when I never would have thought we could move down, and actually my husband would still be working two part time jobs if we remained up north. Some opportunities really are only available in London.

    By the way OP, Brighton to London Victoria by train can be done in under an hour. Again it's a very popular commuter town nowadays. It has a bit of a reputation as a "Little London" now, it's a bustling place and indeed I wasn't surprised to have found an Itsu there which is the only one I have seen outside London!
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