Another FTB question - a flat or a house

SmartGirl_2

I am looking to buy my first property and I am in a bit of dilemma whether to buy a flat or a house. I can easily afford 2 bed flat where I live, affording a house is a bit more complicated, but all the figures should be ok if I rent one of the bedrooms out. Nice flat in the area I am interested in costs around £250k and it is possible to buy 3 bed house for approx £300k. Obviously the bills would be lower for the flat, but what puts me off is the service charge which can be as much as £1000 a year. Supposing I live for another 50 years, all of them in a flat, I would end up forking out £50k on the service charge assuming it stays the same during 50 years (no chance). So at the end of the day, the flat + service charge will cost me more than the house. Obviously, some additional money would need to be spent on house maintenance, such as roof repairs, etc, but it would probably be a fraction of 50k. Am I missing something or buying a flat does not make financial sense?

McAzrael

£1000 is the interest on an extra £23 000 worth of mortgage at table topping rates. You could buy a 2 bed house for £270 000, not need a lodger, own the freehold and have a house. Remember there will be a ground rent on top of the service charge (although these are often peppercorn) and there is more likely to be restrictive covenants and onerous conditions in the lease on a flat. On the other hand, get a top floor flat and never pay another heating bill.

[Deleted User]

I'm looking to buy my first property in london, and my gf and I have made the decision is to buy a house.

Personally, It's because I want a shed. Also, because I want to have a family in a few years and I can't imagine bringing up children in a flat. Kids need a garden to play in.

The extra 100 a month in service charge would also be quite a financial put off also, you never know when they want to increase the charge. If the £1000 pound charge rises at 2% a year, in 50 years it will have cost you £84,579

ukmonkey

To the OP, maybe there wouldn't be much of a difference in terms utility bills...?

I'd go for the house!

david29dpo

these service charges are the next time bomb, buy the house!

lynzpower

Some service charges include water rates, mine does. So I guess I only *lose* 35 a month, but the block is exceptionally well maintained, spotless and secure. Its not bad value really.

You might *need* to rent out a room now, but beware. Your life may change, you might not want them, they may move out and be difficult to replace. Can you be sure that this is something you can RELY on? Additionally, having a lodger *can* cost more in insurances, repairs and general hassle Personally, Id never overstretch myself again, but you live and learn

UK007BullDog

The service charge is there to pay for basic repairs and building insurances and upkeep of the property and its sorroundings. When you buy a house you still have to pay for its upkeep.

If I were you I would look at what your plans are for the future. What do you want to do in 3, 5 or 10 years time? Do you want to have a family? Would you like gardening as a hobby and destresser? A place for you and potential kids to chill out?

With a house you have some control over associated costs. With a flat you are at the mecy of the freeholder and they can set the price for the service charge. With a flat you might also have some restrictive covenants that prevent you from changing parts of the flat or access restrictions, with ha house you do not and can apply to the council for any major changes.

If you only want to put your roots down for a few years, then go for the flat and have some fun, especially if you do not like gardening. Then later look at houses, maybe turning the flat into a Let to buy.

RUSTY1966

Buy House, don't buy flat