Buying 1-bed in London on £20-25k - a *realistic* aim??

london_guy_2

Hello,

I'm 26 and am starting to think very tentatively about long-term aims re. housing. The thought of shelling out a small fortune each year on rent that goes straight into a landlord's pocket for the rest of my life is pretty depressing. My situation is as follows:

. I am single and will almost certainly remain so for the future. I definitely do not want kids. Thus all I am after is a one-bed flat with a bathroom and kitchen. That's all - those 3 rooms will do me fine, in a flat or a sub-divided house etc.

. Area - I want to stay in London. I don't really care about the area - Newham, Barking & Dagenham, Peckham, I don't mind. The 'rep' that some areas in London have is vastly overblown in my opinion and I'm not bothered if people look down on me due to my postcode.

. Expenses - I don't spend much past the necessities tbh. The odd day-trip, a book here and there, that sort of thing. Have done a lot of travelling so not fussed about having foreign holidays every year.

Work - currently I'm working in the 20-25K range, realistically probably for several years hence.

How realistic is it that I will be able to buy a 1-bed property in London within the above parameters? How much roughly will I need to put away each month and how long would it take till I would be in a position to get a deposit etc. I'm thinking long-term here, over the next 5-10 years.

Please be brutally frank - if even the extremely modest set-up outlined above is far beyond my means please say so. I don't know much about housing or mortgages and still need to do a lot of research.

regards,
london_guy

PasturesNew

Where is "London"? The word means different things to different people..... how far is the edge of London?

Wilkins

See what you can borrow using some of the mortgage provider affordability calculators, factor in your proposed deposit and go hunting on Rightmove or similar.

[Deleted User]

The amount you can borrow is dependant on your salary, credit rating and credit commitments. Assuming a £25,000 salary you could be fairly confident in being able to borrow 4x your salary (£100,000). The amount you'll need to save for a deposit depends on the price of the property you wish to purchase, there is a scheme available (called Help To Buy) that allows you to purchase with just a 5% deposit but they require a very good credit rating, if you're going for a normal mortgage you'll need a 10% deposit minimum.

Therefore assuming you want to buy a property that costs ~£100,000 without using HTB you'd need a £10,000 deposit + ~£3500 for fees and then you'd expect to pay just under £600 per month.

Start looking for property on rightmove that meets your criteria and you'll know if you can or not! I don't think you'll find somewhere that cheap in central London but you might swing it on the outskirts in a less than perfect area.

london_guy_2

by London I mean the Greater London council area.

I know a lot of people move to the home counties or the overspill towns, which I can understand if you're raising a family and don't want them to grow up in a dump. My (naive?) hope is that by going for the absolute basics re. one-bed flat somewhere in east London I'd be able to buy somewhere eventually.

btw - in terms of credit ratings, please can someone explain how exactly they work? I've done several short-term jobs with 1-2 months gaps in between and have gone into my overdraft on more than one occasion. However now I'm in permanent employment (hopefully!) and will stay in credit at the bank barring a massive disaster.

Yorkie1

There are 3 credit reference agencies: experian, equifax and (I think) call credit - available through noddle.

Get the £2 versions of each, and look to see whether there are any problems on there such as defaults or late payments recorded.

Ignore any 'scores' from the agencies - they are meaningless in terms of getting a mortgage.

dell12

Barking and Dagenham is just about the cheapest London Borough. I'd probably go for Dagenham over Newham I think.

http://www.rightmove.co.uk/property-for-sale/property-29775027.html

If you can scrape together a £25k deposit you might get something like the above. You could do worse! It's probably going to be zone 4/5 but knowing the area while I wouldn't describe it as lovely - it's safe enough to walk through even at night.

Running_Horse

You might be better investing in increasing your earning power and saving up for a few years. You are still young.

ilikewatch

london_guy wrote: »

I'm 26 and am starting to think very tentatively about long-term aims re. housing. The thought of shelling out a small fortune each year on rent that goes straight into a landlord's pocket for the rest of my life is pretty depressing.

It won't seem so depressing when the boiler packs up, or the property needs re-roofing and you're skint but it ain't your problem because the landlord legally has to sort it out within a reasonable time scale at London prices

london_guy_2

Thanks for your comments.

Yep atm I'm happy renting whilst I get settled into the 'real world'... and in any case putting a bit aside each month won't do any harm, even after 6 years the amount would just about cover the legal fees!

Anyway, I will do some proper research and see how things go over the next few years.

thanks,
london_guy

Fraise

ilikewatch wrote: »

It won't seem so depressing when the boiler packs up, or the property needs re-roofing and you're skint but it ain't your problem because the landlord legally has to sort it out within a reasonable time scale at London prices

How often does the boiler pack in? And if they do you're only looking at around £1k. You will earn that with property inflation in less than a month in London. As for a roof. They should last a minimum of 60 years, maybe 100 years. If he buys a place with a good roof he won't have to replace it in his lifetime, probably

It's not true, either, that landlords HAVE to make repairs with a certain time. Some landlords couldn't care less and you have to lump it or like it.