First investment for a 27yo, London or Manchester

princeofpounds

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?

We don't know. No-one does. Whether it is a better investment to mortgage up for a 2 bed or stay at a cheaper 1 bed is an outcome that is likely to be dominated by changes in house prices over the investment period.

The ability to get a lodger makes a 2 bed fairly attractive if you are happy to live that lifestyle. The yield contribution will probably be more than a mortgage, in the short term at least.

It also future-proofs you in that if you get a live-in partner then it is less likely you need to move right away.

k3lvc

Have you sold a Yaris recently (or maybe an M3) ?

https://forums.moneysavingexpert.com/discussion/5065087

Mark1987

@Pixie5740: I had many looks at Rightmove to be honest but, even if it's 2 years I've been living in London, I still can't value a good or a bad offer. Too many houses with different prices, even in the same place. Plus I need to understand very well how leasehold works to know if it's a good offer or not. It's not so easy

@princeofpounds: Yes, I was thinking the same. Considering that I'm 27yo and I can have that deposit, probably it's better to wait for clearer ideas about the place where I want to settle down. It would have been much easier if we were talking about a "normal" place instead of London I'm just trying to find a way to not spend money with my rent. It's 9 years now I've been paying houses to other people

@k3lvc: I didn't sell any car

Dhrucku

Well done for saving 140k for a deposit. With that kind of deposit I would search for a house outside of London with a decent commute and use whatever the banks lend you.

Is part of the deposit a gift by parents or inheritance as it is unseemingly large in comparison to the job your salary entails to?

Mark1987

I was thinking about buying something just outside London but then it would be a problem if I find a better job in the opposite part of the city. Do you have any suggestions? Since I live in west London now, I was thinking about Woking, Weybridge, etc.. they are not so far from Waterloo but I guess the price there is not so far from London houses.

My deposit is part of my parents' savings, as I said, it could be 180k or more but I need to sell something first so it doesn't really depend on me
With my salary now to be honest I'm getting a bit scared about monthly payments, I mean £17k maybe it's not enough for mortgage, bills, transports, even if I rent one room. I thought it was less to be honest.

[Deleted User]

hah, you need about £220-240k to buy a terrace house in reasonable area in ZONE 6, let alone central london. You could get quite a nice boat though http://www.rightmove.co.uk/property-for-sale/property-44659675.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DREGION%255E87490%26maxPrice%3D140000%26minBedrooms%3D2%26maxBedrooms%3D2%23locationIdentifier%3DREGION%255E87490%26maxPrice%3D140000%26minBedrooms%3D2%26maxBedrooms%3D2%26box%3D-0.56995%2C0.35840%2C51.28450%2C51.76809%26popupPropertyId%3D44659675&fromMap=true

Property is MAD

House prices in London are not for people on £17k salaries to be playing with, without knowing the areas well. Why don't you wait until you can actually service a mortgage before getting into this? Other option is to buy in Manchester where the prices are quite affordable, and you'll have tonnes of disposable income one your salary grows

cinnamon442

You'd be better off waiting until you've either got a permanent job and are able to please the banks for a mortgage, are on a higher salary as a contract employee and can prove two year's worth of accounts, have saved up enough that you can buy outright in cash or are prepared to move out to Manchester or another place further north where prices are cheaper and more in that range.

You won't get anywhere buying in London on your salary and situation due to the housing market craziness in the capital and to be honest, in your current situation, I wouldn't want to because it could go belly-up very quickly with your contract and 17K salary! Sorry to be so blunt.

Mark1987

Eheh no worries, I appreciate your advice, probably it's better to wait, yes.

princeofpounds

I'm just trying to find a way to not spend money with my rent. It's 9 years now I've been paying houses to other people

If you buy with a mortgage, you are effectively renting the money rather than the house.

If you don't buy, you can invest your deposit savings to earn a return.

Depending on how house prices move, which is better can change a lot.

Rent = Dead Money is an economically illiterate concept. Unfortunately 20 years of an unprecedented housing bull market doesn't make people want to really understand these concepts.

Mark1987

My idea was to buy a cheap property in less than 10 years to sell/rent it after to buy something bigger. Even if small, I will have a return. Renting a room I won't have any return, unless I invest my savings in something else but I don't have enough knowledge to take a risk, even if low.