Intrepid FTB ventures out in a falling market

mrak

Hey guys - impatient FTB here seeking your views. I've found a place, and I'd like your advice, bulls and bears alike.

After waiting several years for property to edge slowly downwards in London, I've finally spotted something that I consider to be "cheap". I spotted a flat near my place of work which looks ideal for my situation. It's a 2-bedroom, ex-council flat on the market for £150k. I have put in an offer of £135 which has been accepted this week.

I'm now in the process of arranging a mortgage, and understand that the success of my application depends entirely on the outcome of the valuation (it's a concrete high-rise no less.. there's a chance that the valuer may report that this place is too risky to mortgage, but I'm quietly confident that this won't be the case. Several others in the block were mortgaged recently).

I've got a £35k deposit and a 15 year mortgage would leave me repayments of about £850 a month. This is manageable on my salary, but my intention is to let out the second bedroom. One of my current housemates has agreed to take this room, and split between us, our accomodation costs would then be £425 pounds a month, roughly the same as what we're currently paying out in rent for our current flat anyway.

So, what I'd like to know is: Is this a winner? I think £135k for 2 beds in Zone 1 (less money wasted on our crappy tube service) is a decent gambit. I know that the value will certainly fall in the next two years, but I'd consider a modest fall of £10,000-£20,000 or so across the next two years acceptable as it would otherwise be spent paying rent.

As an FTB, I'd appreciate any London-specific or high-rise-specific tips that you're willing to share.

Thanks in advance for your help!

Mrak

lostinrates

At those sums, for DH and it would be worth it and risking the loss. He pays £400 pam to lodge, plus tube fares.

Hmm. Where abouts is the flat, lol, anymore like it?

hethmar

Sounds good - whereabouts in zone 1?

mrak

It's in E1. I work about 10 minutes' walk from the flat, so I can easily overcome my misgivings re: the external appearance of the flat when I consider the extra 90 minutes of free time I have not travelling out to Zone 6 where I originally hail from!

mrak

hethmar

Well good luck then mark. Hope it goes through for you. I know some lenders are iffy about concrete high rises but if you say others in the block have recently been mortgaged. Do you have any off road parking there at all? Do have a mooch round there at various times of the day and week so you can see if there are any obvious draw backs locally.

Soot2006

I'm also a FTB thinking about sticking my neck out in the next year or so.
The way I see it is you're buying this flat for yourself - it's not costing a bomb, it's in the right location & importantly, you like it and want to live there.
As such, I think you should bite the bullet. Sure it might be cheaper next year, but at the end of the day it can be your home right now .
Might be worth gazundering another £5K off the price though *ducks* ....

maryjane01

I lived in E1 and I found it rather scary. Drugs are an extremely common problem, and while I was living there there was a program on TV that posed the question whether there were 'no go' areas in Britain focussing on E1. If you are white you will definitely be a minority, which is not necessarily a problem in itself, but is is an area with a lot of poverty so if you are white and look like you have a job you will really stand out. Maybe hang about near by in the evening times before you commit to buy. Muggings are very common in the area, I was mugged myself. I am a white female, if you are male and/or from an ethnic minority you might not find it so bad. You get a lot of undereducated males from poor families that hang out in gangs in the evening time which I found very intimidating.

I guess it should be easy to rent out though if you didn't want to live there anymore and couldn't sell it.

brit1234

Be aware you could be liable for repairs costing thousands - tens of thousands of pounds with council blocks. Personally I wouldn't touch a ex council place unless it was a house or masonette. The money risk is to great.

Austin_Allegro

Hard to tell without seeing it, but I wouldn't go through E1 unless I was in an armoured car, let alone buy an ex-council flat there.

But then, I am a bit of a snob and don't really appreciate 'vibrant' areas...

I'm starting to see small 1 bed flats in nicer areas of London (albeit further out) for around the same price, and that's where I'd be looking, if I didn't think prices were still going to come down further.

hethmar

Well, before you part with your money Mark, do a bit of research on the area and perhaps check on rightmove and findaproperty to see if anything else catches your eye?

wubbue_2

I grew up in E1. That postcode covers a pretty large area: Whitechapel, Stepney, Shadwell, Wapping. Some bits are worse than others, eg Wapping's nice, Shadwell's not! (I'm from Shadwell btw) However, like you point out, E1 is really close to the city and has good transport links so I'm considering buying there one day too. They've been regenerating the area in the last few years so it's not as dire as it used to be. It was horrible being there as a teenager but now I'm older I don't feel that the "yoots" are that bothered about me. You should find the same is true with you. Just remember to keep your head down but walk tall... as contradictory as that sounds! :-)