Buying a first home in London - good idea?

Dunney77

Hi there,

I moved to London 2 months ago and am looking to buy my first home. The maximum I think I can spend is £425,000 (includes mortgage).

There is a two-bedroomed apartment in a Canary Wharf property development I am interested in. Are new-builds risky? It won't be completed to 2016 but as the whole area is being redeveloped, I think this might be a good investment for the future? I have been constantly told that you cannot go wrong with London real estate but I am not so sure. I was planning on bringing a friend in so I can pay off my mortgage quicker.

What are people's views on such a plan. I want to try stay in central London but what would people do with regards to buying their first home?

Best

chris198232

Buying in London completely depends on your situation. If you work centrally and don't want to commute more than 20 minutes to work then Canary Wharf would be ideal.

If it was a BTL investment I'm sure you would rent it 365 days a year! You could also buy a two bedroom house in outer London in up and coming areas such as Penge or Brixton.

For reselling I think houses would be better, Central London is flooding with new build flats.

New builds are not risky, you may pay a 5-10% premium but risky, no.

Personally I'd buy a house in Surbiton, Wimbledon etc etc and commute 35 minutes to work.

Other options could be a three bedroom in somewhere like Woolwich (really up and coming with new links). Somewhere like this is really where you could see good returns in 5 years time!

chucknorris

Dunney77 wrote: »

Hi there,

I moved to London 2 months ago and am looking to buy my first home. The maximum I think I can spend is £425,000 (includes mortgage).

There is a two-bedroomed apartment in a Canary Wharf property development I am interested in. Are new-builds risky? It won't be completed to 2016 but as the whole area is being redeveloped, I think this might be a good investment for the future? I have been constantly told that you cannot go wrong with London real estate but I am not so sure. I was planning on bringing a friend in so I can pay off my mortgage quicker.

What are people's views on such a plan. I want to try stay in central London but what would people do with regards to buying their first home?

Best

I wouldn't put you off, I think you would only lose out if the market dipped AND you also found yourself in a situation where you had to sell. If you hold the property long term there is little that can go wrong. The London rental market is excellent (we have a few investment properties) so that is always another option in the future rather than selling, if you found yourself having to move jobs or wanting to move in with a partner.

Have you checked out the service charges, personally I would rather buy a freehold house in a less popular area, but that is just my personal choice. Although I do have 4 flats in Battersea, so I haven't always practiced what I'm preaching (although we do also have 4 houses).

TranceNRG

That's a very healthy budget for a FTB. I am in the process a 2 bed flat out in West London and my budget is just below yours. I think now is a good time to buy with interests being low (reckon they'll go up next year) and prices fairly static. I expect the prices to start going up after election.

I'd say go for it.

stardust09

Out of curiosity, what is the service charge/ground rent fees for that new build? I've heard they can be quite steep.

TranceNRG

stardust09 wrote: »

Out of curiosity, what is the service charge/ground rent fees for that new build. I've heard they can be quite steep.

Yep that turned me off buying an apartment especially new ones. Around where I was looking (Ealing/Brentford) service charge and rent were about 2 grand for new apartment flats. Ridiculous!

stardust09

TranceNRG wrote: »

Yep that turned me off buying an apartment especially new ones. Around where I was looking (Ealing/Brentford) service charge and rent were about 2 grand for new apartment flats. Ridiculous!

That is quite a substantial amount per month to find. Wow!

TranceNRG

stardust09 wrote: »

That is quite a substantial amount per month to find. Wow!

That's per year not per month! Still a substantial amount.

That's not even the highest though. Some of the apartments flats had 2500+. I wouldn't be surprised flats in central London were charging even more.

Anyway I prefer period conversions so I concentrated on period conversions in the end.

stardust09

TranceNRG wrote: »

That's per year not per month! Still a substantial amount.

That's not even the highest though. Some of the apartments flats had 2500+. I wouldn't be surprised flats in central London were charging even more.

Anyway I prefer period conversions so I concentrated on period conversions in the end.

Sorry, yes, I know. I had done some sums before posting and they came to £166 per month, which I think is still a substantial sum! I think service charges are the hidden Satan in buying flats, new builds or not.

caronoel

Investing in London property is always an excellent idea, as long as you are prepared to take a longer term view.

Issue with a new build is that there are relatively few price comparators for you to value the apartment against.

Also, you will need to fork out for decorating and carpets that may already be in place for a second hand property. Even if it is not to you immediate taste, it may suffice until you have the funds to do it up.

In terms of location, I would consider looking for somewhere near a station East of the new Crossrail line. Some good value houses in the likes of Abbey Wood that will skyrocket in value and be eminently rentable once the line opens in 3 years.

Running_Horse

Are you really recommending someone live in Abbey Wood?

http://www.rightmove.co.uk/property-for-sale/property-48396028.html

I suppose they could buy a couple of these and still have change.