Flat or House?

andywilson460

Flat or House?

A quick question. I have about £70K saved up for a deposit - I sold my old house a couple of years ago - STR - and now I'm thinking about getting back on as places around my way have dropped quite a lot.

The dilemma I'm now facing is do I buy a 3 bed house that I would like to live in for 6-9 years for c. 190K now and then pay back a mortgage of around £140K with a reserve fund - or do I buy a 2-bed flat for c.£90K - pay off mortgage in 1-1.5 years and then either save for house or rent out flat and use it as collateral for a house (if possible) - That way the rental income will help to offset the mortgage costs?

I'm not aiming to BTL in the traditional way, as I could nearly buy outright - Just interested in others opinions. Annecdotally properties our way are dropping quite rapidly (especially flats) - South East, Coastal as the prices were so out of touch with local salaries.

I'm not a troll, and know the usual "buy for a home not an investment", but I have saved hard to get my first house, made a little money on that, and now saved hard for the deposit - I am just wanting to use my money in the wisest possible way

All comments welcomed

RetroBob

I would go for the 3 bed now, provided your credit history is fine you'll have no problem getting the very best rates for it.

I rule out flats from the start because I make a lot of noise (videogames) and so don't want to disturb people above/below me and make sure the living room is on an outer wall if it's a semi.

andywilson460

I have lived in loads of houses, and have been in rented for the past 1.5 years, so have a good idea of both flats and houses - I am just wondering about how to intelligently use the money to work for me.

To many that might seem very capitalistic - not meant to be, just want to play the market, rather than being dominated by it like so many other buyers have been over the past 3-4 years

olly300

Moving costs money i.e. solicitors, moving costs and stress.

Buy a bigger house and live there longer as it makes your life easier.

andywilson460

Agreed - certainly the easiest option, and debt-free soonest as well. Still undecided though

ixwood

Flats will fall more in % terms. I'd go for the house now.

Although, I guess the extra interest payments on the bigger mortgage should be taken into account as well.

david29dpo

And dont forget the posable rip off service charges of some flats, not to mention the lease.

Greenr

ixwood wrote: »

Flats will fall more in % terms. I'd go for the house now.

Although, I guess the extra interest payments on the bigger mortgage should be taken into account as well.

I have just spoken to my mortgage provider, the guy said that flats aren't loosing as much value as bigger more expensive houses as people can still afford to buy flats and they attract first time buyers..

I live in a flat, i hardly hear or see any neighbours. My partner's parents hear more from their neighbours in their semi detached house!

Bills are lower for us, we have great views and we don't have to worry about gardening.

Careful_with_that_Axe

I would go for the flat - they are going to attract the largest purchaser base at re-sale time. From 1st time buyers, movers from a 1 bed to a 2 bed and people downsizing.

genny

House everytime - to live in, because: a flat will not increase in value as much, you are only a leaseholder in a flat, not freeholder, if the lease is short, the property could lose value, maintenance charges / yearly fee payable (for lifts, communal areas etc), close proximity to neighbours can be a noise problem.

However flats can rent out better, but it depends on the area, it's often easier to rent a flat than a 3 bed house.

ixwood

Who downsizes to a flat? They're "starter" homes. And only become popularish because people WERE priced out of the market for houses. That isn;t the case now.