Newbie on board, advice sought :-)

PasturesNew

Tricky one... I wanted to tell you to go for the one close to work, because that way you save on travel time and cost and fuel's only going to cost more in the next 20+ years.

But I couldn't go for number one because of the following:
- cost of service/other charges now, and into the future
- it's leasehold
- shortness of lease and cost to extend it.

I'm afraid I'm going to have to vote for number two, the pricier option.

Personally, I'd sit on my money for awhile and keep looking. There must be something that comes up in the next 1-2 years that's a good compromise between the two. i.e. closer to work, midway point pricewise, yet not leasehold.

If you add up the costs of both houses (and travel) over the next 5 and 10 years you'll see the cheaper place will probably cost you more than the better place.

RAS

Also add in the possibility that if you can get a two bed property, you can get a lodger and do not have to pay tax if you charge less than £370ish a month.

kentishdoris

Can I play devil's advocate and ask why you're so keen to buy?

There seems to be a really big emphasis on the importance of owning a home and I think you need to really think about the implications. On top of the mortgage and the management charges and ground rent you'll have to pay the cost of solicitors fees and all that comes with moving needs which can be very costly.

Have you thought about how long you might want to stay in the place you're looking to move to?

I'm making a huge number of assumptions but from what you say about yourself it sounds like you might be at the stage of life where you could meet a partner and decide to move in together quite quickly (I say it because all my friends are doing it). If that happens you might find you've bought somewhere that's not really big enough and not what you both want.

I know it's hard to predict the future but house prices are low at the moment and don't look likely to go up any time soon. Don't leap too quickly in to buying somewhere just because everyone else is - it could end up being very costly if you're not planning to stay all that long.

Oh, and if you do decide to buy I'd go for a freehold over a leasehold any day. Particularly if it's under 99 years.

Alan2020

Thank you all for the great replies.
I was looking to buy as I relocated to my new job, which makes available funds to cover solicitors fees, move, mortgage fee and stamp duty (all up to £8,000) if I buy within the 2 years, hence why I was looking at buying, the other reason being, I spend £8280 renting, which seems a pretty big waste to me, as at the end of the day own nothing of value! Also savings is hard with all the outgoings etc

As people have correctly pointed what happens if I leave or meet someone, again what if I leave it too late, there are lots of restrictions about rented property as most of you will have experienced.

So a very confused me!

SusieT

I can see the atraction of buying your own if your employer is covering some of the costs. I would be looking at 2 bed houses as that would give you a bit of room if you have changes in your life and either want to move a partner in, take a lodger and also if you decide in however many years that you want to sell it would be a better proposition than a property that may by then be a short leasehold.
There are a good few places with access to your work if you do a search so hopefully you will find one that suits you.

neverdespairgirl

princeofpounds wrote: »

You are right to ask the question, but there are plenty of ground rents this high in London.

It does seem very high - our ground rent (1995-ish conversion from an office) is £120 a year.

Fire_Fox

Alan2020 wrote: »

Dear MSE experts, new to the forum, but long time lurker

I am a first time buyer, and looking at getting my own property. Living in the SE of England and currently renting a one bedroom flat at £690/month. There are two properties I have my eyes on,

Firstly a one bedroom maisonette with allocated parking for sale, at about £88K and 84 years left on the lease. The ground rent is ~ £1200 PA and service charge is ~£460 including insurance. The flat is five minutes walk from where I work.

Secondly a two bedroom link detached property, ~£150K, with garage, garden and drive for 4 cars. It has been recently refurbished, in a good area but 30 minutes drive to my work and another 30mins back!

I have about £25 to 30K deposit and earn about 32K PA. What would MSE advice me on this dilemma I face. I am single by the way and about 31years old if it helps :rotfl:

Thanks a lot for your help,
Alan

Would you still run a car if you lived close to work? If not how much is running the car going to cost (ALL the costs, including maintenance)? Why have you mentioned the four car drive, is this useful to you? 84 years means lease needs extending ASAP, how much will that cost and how will you pay?

I wouldn't personally touch a one bedroom, you can't take a lodger and you can't really move your (future) partner in. Trust me service charges, ground rent and insurance become very expensive if you can no longer work - redundancy, illness or injury. AFAIK you cannot insure against them.

Why do you need to buy either of these properties? Obviously neither is right or you wouldn't be consulting strangers on a forum.

princeofpounds

which makes available funds to cover solicitors fees, move, mortgage fee and stamp duty (all up to £8,000) if I buy within the 2 years, hence why I was looking at buying,

This is not a bad reason to think about it, even though I believe that house prices will perform poorly.

the other reason being, I spend £8280 renting, which seems a pretty big waste to me, as at the end of the day own nothing of value!

This is not a good reason. Psychologically people seem to think they own a house when they buy with a mortgage. Technically they may have title, but in reality they rent from the bank and buy an option to purchase the house at the original price. Interest is as much dead money as renting is. You only ever own the equity in the house, which in the beginning at least is going to be roughly the level of your deposit.

Alan2020

Thanks once again for the useful advice :-)

I was trying to see is it worth loosing the incentive my employer gives versus buying in a nice area and preferably a freehold property.

Also with renting, I see that people say the interest is expensive, but over the long term wouldn't buying the house on a repayment mortgage be better or are my calculations wrong? I thought one can overpay as pay rises?

I will agree with the posts on Service charges, ground rents etc, seem too high and scare me what happens if you can't meet them for a short while!

princeofpounds

Also with renting, I see that people say the interest is expensive, but over the long term wouldn't buying the house on a repayment mortgage be better or are my calculations wrong? I thought one can overpay as pay rises?

No is the short answer! In fact, you can lose a lot of money on property as well as gain it.

Leading you through it all is pretty long-winded and I don't have time right now, but maybe I will return to it later.