First investment for a 27yo, London or Manchester

cinnamon442

Your salary determines the amount of mortgage you can get. If you don't have a permanent contract, certain banks like Halifax won't even let you through the door, let alone assess your affordability. Trust me, I'm self-employed and not on a permanent contract and we had to do everything through my partner because they refused to consider me.

Everything over 125K will get stamp duty of 1% up to 250K so that's an added cost too, plus solicitor fees so you'll need to deduct all that from the 140K, which'll reduce that figure too.

And then to top it all off, places advertised at a certain price are achieving far over the asking price when sold. For instance, a two bed house smaller than the flat we eventually bought further out was on for 240K, and sold for 285K. So even if you've seen one for under 200K, chances are that won't be what it sells for.

Mark1987

For what I read here it seems the best thing to do is wait for a better contract or at least to know where I want to settle down. Unless I will move to another town, in that case I guess £140k is enough to buy a decent property.
Just for curiosity, buying a flat, how much I would pay each month for taxes and bills? Renting a room will cover half of the mortgage at least?

Pixie5740

Mark1987 wrote: »

For what I read here it seems the best thing to do is wait for a better contract or at least to know where I want to settle down. Unless I will move to another town, in that case I guess £140k is enough to buy a decent property.
Just for curiosity, buying a flat, how much I would pay each month for taxes and bills? Renting a room will cover half of the mortgage at least?

How long is a piece of string? That's the answer to your taxes and bills question. As a starter for 10 you could have:

council tax
gas
electricity
water
tv licence
contents insurance
leaseholder fees (or whatever it is you call them)
service charges
telephone line
broadband

I don't know how much your mortgage repayments would be or what the going rate for renting a room is in London. I do know that under the rent a room scheme you can get up to £4250 tax free each financial year, anything over and above that would be subject to income tax. If your rental income is over the £4250 threshold then you'd also need to complete a tax return. I think the £4250 is inclusive of rent and bills.

Cisco001

Don't know how much council tax & management fee for a flat in london.
But I would guess your bills will be looking at least £250 - 300?

Mark1987

I think I could easily rent a room for £400/month in a £200k 2-bedroom flat in London

Mark1987

Do you think a £180-£190 deposit is enough to buy a decent flat in London? Somewhere well linked? Even if my salary will be still £17k for a while, I could reach that deposit in a few months, so maybe wait it's the best solution for now

princeofpounds

Do you think a £180-£190 deposit is enough to buy a decent flat in London? Somewhere well linked? Even if my salary will be still £17k for a while, I could reach that deposit in a few months, so maybe wait it's the best solution for now

How are you managing to save so much out of interest?

The deposit isn't really your problem - it's the lack of ability access the extra ~70k you could borrow on your salary.

But if you were to have 180k deposit and 70k borrowing capability, you could go for flats around the 250k stamp duty mark. They won't be the best-located at all - probably a bit far out - but if you are ok with that then you could realistically start looking.

Mark1987

Fortunately I have some family savings, sold some lands, etc..

Isn't a £250k flat well located? That's crazy! I don't really care if it's not central, but at least something close to a tube station, any.
It's just crazy London, maybe £180k saving would be enough to buy a proper house somewhere else

Are there any terraced houses around 200-250k in London? It may be better to save some money and to avoid the leasehold. what do you think?

Mark1987

What about a studio flat or 1-bedroom flat well located, maybe to pay in cash? Could it be a better investment than a mortgage for a 2-bedroom flat?

Pixie5740

Why don't you have a look on Rightmove to see how far your budget will take you in London?