Realistic Costs of Owning a 2 Bed Flat

Carpi09

Good evening all,


Looking to get on the ladder with a 2 bed shared ownership flat.


Do you think the below table covers all the costs associated with running a two bed flat. 1 person living there.





Anything I have missed or way out?


2 days overtime a month for me is easily achievable so the bold red is left over per month after adding overtime.


Please don't look into the mortgage that much, I know it will rise. Probably will go for the 13 year term.


Thanks

Cornucopia

Seems pretty thorough.

I assume that your £2.50 car tax is for a low-emission vehicle? Also £200 per month on food is quite generous, unless you have expensive special dietary requirements.

Utilities may be more like £60-70, depending on the size/EPC rating of your flat. Your contents insurance won't be anything like £30pm, unless you plan to live in The Bronx (£10 is more than adequate). You can obviously cut out the TV licence by using your broadband to deliver catch-up TV, only. You also need to add something for the service charge on the flat (say £100 per month), but your ground rent is way too high - typically £12 per month.

I would suggest that you don't lock yourself in to a 13-year term from the outset, but instead go for a "normal" 25-year term with overpayments. This is a much more flexible way to give the same end result. You also don't appear to have a vast margin for contingency, socialising or holidays, and this will give you that flexibility.

Carpi09

Cornucopia wrote: »

Seems pretty thorough.

I assume that your £2.50 car tax is for a low-emission vehicle? Also £200 per month on food is quite generous, unless you have expensive special dietary requirements.

Utilities may be more like £60-70, depending on the size/EPC rating of your flat.

I have been generous with all of it I think, I'd rather be generous than try and be too optimistic. My car tax is £30 a year. I like to eat good food, it's a must for me.


EPC rating is BB, don't really know how to work this out, I researched the internet for est gas/electricity if im honest.



But surely, if you go for a lower term mortgage, you will pay less interest because the overpayments are locked at 10% per year? That is a great suggestion for me though, maybe I could go for longer because of the 10% overpayment!

aggypanthus

Leccy and gas seems too low.
Is CTax incl single person discount?
Contents insurance is rather high, you could half that at least.

Carpi09

aggypanthus wrote: »

Leccy and gas seems too low.
Is CTax incl single person discount?
Contents insurance is rather high, you could half that at least.

Two people have said that about that now, maybe I need to raise it to 50 then.
Council tax discounted.
Sorry, the contents title includes Home Insurance and PPI too

aggypanthus

Ah.buildings and contents ? worth doing a comparison anyway.
Do you have term life insurance? The younger you are, the cheaper it is.

I expect heating will be more in winter, my gas for a 3 bed was 32, then just gone up to 50, leccy is staying around 35 monthly.

enthusiasticsaver

I would say the contents insurance looks too high and the gas/electric/water looks too low. You need to build in a contingency fund for white good replacement, essential repairs etc etc. Does the ground rent cover the rent on the shared ownership element and the service charges etc to freeholder? If I were you I would initially go for the 20 year term and allow for overpayments until you actually know what all the costs are for definite.

martin.cat

Personally you are reliant on overtime
I would opt for longer term to give you breathing space if owt happened.
I would then use overtime to overpay mortgage which will bring term down
Mse has a calculator for overpayments so check it out

Cornucopia

Carpi09 wrote: »

But surely, if you go for a lower term mortgage, you will pay less interest because the overpayments are locked at 10% per year? That is a great suggestion for me though, maybe I could go for longer because of the 10% overpayment!

Not all mortgages have a 10% max overpayment. Also, if you plan to run a £300-400 surplus every month, maybe you could look at an offset product? Also, if you are genuinely looking to clear this in, say, 15 years, look at 10-15 year fixed rates.

The amount of interest you pay obviously varies with term, rate and capital outstanding. However, you are likely to be paying sub-6% for some time to come, and this will make it cheaper credit than anything else. Well worth considering how to maximise the benefit.

Carpi09

aggypanthus wrote: »

Ah.buildings and contents ? worth doing a comparison anyway.
Do you have term life insurance? The younger you are, the cheaper it is.

I expect heating will be more in winter, my gas for a 3 bed was 32, then just gone up to 50, leccy is staying around 35 monthly.

Never really considered life insurance if I'm honest. I am a 25 year old. I prefer a cold house rather a warm house, so I don't think I will use the heating that much at all.

enthusiasticsaver wrote: »

I would say the contents insurance looks too high and the gas/electric/water looks too low. You need to build in a contingency fund for white good replacement, essential repairs etc etc. Does the ground rent cover the rent on the shared ownership element and the service charges etc to freeholder? If I were you I would initially go for the 20 year term and allow for overpayments until you actually know what all the costs are for definite.

I have raised the gas/electric bill. I think the water is fine, someone told me they pay £12 for water in the block of flats.


I have £10,000 for emergencies.


Rent covers: 50% Ownership, Ground rent, Maintenance, Building Insurance.
I wonder if this includes the Service charge? (Is this maintenance????)


Thanks, I think I agree with the 20 year term having thought about it :-)

martin.cat wrote: »

Personally you are reliant on overtime
I would opt for longer term to give you breathing space if owt happened.
I would then use overtime to overpay mortgage which will bring term down
Mse has a calculator for overpayments so check it out

Thank you, my shift pattern is 6 days working 4 off. That gives me at least 12 days a month to have 2 days overtime. This is very achievable in my line of work.

Cornucopia wrote: »

Not all mortgages have a 10% max overpayment. Also, if you plan to run a £300-400 surplus every month, maybe you could look at an offset product? Also, if you are genuinely looking to clear this in, say, 15 years, look at 10-15 year fixed rates.

The amount of interest you pay obviously varies with term, rate and capital outstanding. However, you are likely to be paying sub-6% for some time to come, and this will make it cheaper credit than anything else. Well worth considering how to maximise the benefit.

The only thing is, I may move in say 3-5 years time so don't want to be locked in for that long. I would like an offset product, haven't been able to find any. First Direct require high salary.


Thank you

KiKi

I live in a 2 bed flat, have done for 8 years. My comments:

* Gas / elec may be a little low. I am on the lowest possible (I move suppliers regularly); I use hardly any gas, not that much electricity, and I'm on £53 a month.

* I pay £19 for water; I shower every other day, using the washing machine once a week max, wash up every other day. So that may give you an idea of your expected bill.

* Home contents is far too high, unless you have some crazily high value items! I pay approx £60-£70 for the year. Don't forget that you don't pay buildings insurance - that'll be included in your Maintenance (which I assume is included in your Ground Rent section)

* Ground Rent is very high. I assume that it includes Maintenance as well, but that's still very high. What's your lease liability (the percentage)? Will it be share of freehold?


No idea about car stuff - I don't have one!

HTH
KiKi