London first time buying

BitterAndTwisted

I'd be renting and looking to save at least £5k per annum on a £25k-£30k starting salary

princeofpounds

Hey, I'm a few years ahead of you and in London, so I've looked into this.

You will get nothing worth buying for your budget. Your deposit is actually reasonably decent, but your total budget at a sensible mortgage multiple is not. Unless you like living way out of town in a box on a shabby estate.

Anywhere else in the country you'd be in a pretty good position for a FTB so you may wish to consider buying nearer home if that is somewhere cheaper and you are desperate to own property. I wouldn't be, you are young and need the flexibility in case you end up with better job offers from elsewhere.

When you apply for a mortgage the bank will probably ask you about the student loan and not count it towards deposit purposes or insist that it is paid off or the debt added to the mortgage.

There is nothing wasted about renting. You probably won't even begin to know the areas you will like until you have spent a couple of years in London, at least to a level of committing to buy. In addition, although renting has a feel of 'money down the drain' this is one of the biggest myths out there. Mortgages, at least in the early years, are effectively renting from the bank as you pay dead money in interest.

What sector are you in? Will give an idea of likely earnings progression as well which may have a bearing.

nollag2006

princeofpounds wrote: »

What sector are you in? Will give an idea of likely earnings progression as well which may have a bearing.

That's actually a really good point. If you are in an area where your earnings are likely to rise rapidly over the first 2 - 3 years, then it could be worth holding off for a little while.

My concern would be that the market is now rebounding from the 2008 crash at a very rapid pace, and that any increase in earnings could quickly be negated by rising house prices.

Agree completely though, that renting (and even sharing) is a good, low risk, way to get to know an area you like

patch3228

http://forums.moneysavingexpert.com/showthread.html?t=1398663&highlight=ftb+lost+london


May glean some info from my thread..

vicky04

Thanks for everyones advice, i will take it onboard!

I have paid the tutition fees upfront to the univeristy so only have taken out the maintenance loans each year to put in savings where they have stayed. I have worked almost full time during my studies, and I live at home at the moment so have saved alot!

I am always finance minded and try not to waste money, but still spend alot on clothes and going out weekends/holidays etc , so i know i would still be able to meet bills, repayments etc. I have spent alot of time in London, but agree it would take years to get to know the areas taht are most favourable. I am hoping to go into finance - touch wood with the job interviews and offers at present though!

I will seriously consider renting now, as £125,000 won't get me anywhere really!

kmmr

I say start with renting - but if you really want to own your own place in London, then keep looking all the time. Once you have seen 20 houses in an area, you can identify the 'bargain' properties when they come up, and they do!

Distressed sales, sudden moves - deceased estates. They are all around if you are in the area and paying attention to the new listings.

You can still get a 2 bed place in Leyton/Leytonstone for around £150k (some are advertised at a bit less). Not a great area, but with the Olympics pouring money into the east, and Westfield opening soon, I think it's good value in the longer term. And on the central line - 30 mins to central london.