Buying a studio flat in London

ruelle

I've had an offer accepted on a studio in Walthamstow. Initially I thought it was exactly what I wanted - top floor, 10 mins walk from the tube, in a quiet neighbourhood and close to my friends - so I bid my maximum as it went to sealed bids and now I feel like I overpaid by a few grand.

The only con and it's a big con is that it's a studio. It's 21 sq m but it has a separate kitchen and sleeping area. It basically looks like a tiny 1 bed with a wall missing.

Are studios in London a good investment? For the money I'm paying I could probably get a 1 bed in a not very nice area far from my friends.

Or should I try to save like crazy in the next year and hope that something relatively cheap comes up in the areas that I like?

The market does seem to be cooling at the moment. Have noticed lots of asking prices reduced on Rightmove but it's a risk of course and there's no guarantee that it won't continue being ridiculous and I'll be priced out completely.

I'm single at the moment so it's fine for me but I would like to settle down in a few years and start a family so is it silly to buy something that is too small for 2 people to live in or should I just get on the ladder as London prices are so crazy?

Help!

HiToAll

get on the ladder now, quickly

economic

i would wait, a studio will be very difficult to sell if you need to in the future. rent for now, prices seem to be cooling.

Helvetica_Van_Buren

I'd bet buying ANY property in London is likely to be a fair investment.

The problem is, a rising tide lifts all ships and as that property value rises, so will the value of others.

And property prices WILL rise. The only way they won't is if anything like the following happen:

- A massive drop in population.
- A sudden availability of properties to purchase.
- A ban on owning more than one (or two) properties.

It's very unlikely that we'll see any of those scenarios.

Even if there was a recession, property prices aren't likely to dip or remain static - so much foreign money is put into British property, especially in London.

The point being: property prices are only going to go up.

ruelle

That's what I'm worried about - whether it would be difficult to sell in the future...

Helvetica_Van_Buren

economic wrote: »

i would wait, a studio will be very difficult to sell if you need to in the future. rent for now, prices seem to be cooling.

Nothing in London is hard to sell.

Prices are definitely not cooling.

HappyMJ

ruelle wrote: »

I've had an offer accepted on a studio in Walthamstow. Initially I thought it was exactly what I wanted - top floor, 10 mins walk from the tube, in a quiet neighbourhood and close to my friends - so I bid my maximum as it went to sealed bids and now I feel like I overpaid by a few grand.

The only con and it's a big con is that it's a studio. It's 21 sq m but it has a separate kitchen and sleeping area. It basically looks like a tiny 1 bed with a wall missing.

Are studios in London a good investment? For the money I'm paying I could probably get a 1 bed in a not very nice area far from my friends.

Or should I try to save like crazy in the next year and hope that something relatively cheap comes up in the areas that I like?

The market does seem to be cooling at the moment. Have noticed lots of asking prices reduced on Rightmove but it's a risk of course and there's no guarantee that it won't continue being ridiculous and I'll be priced out completely.

I'm single at the moment so it's fine for me but I would like to settle down in a few years and start a family so is it silly to buy something that is too small for 2 people to live in or should I just get on the ladder as London prices are so crazy?

Help!

I would not buy anything that I would not consider my "forever" property.

As I would not want to live in a studio "forever" I would not buy it preferring to rent and save like crazy instead.

It could be a good "investment" property that you let out to tenants depending on the gross return. Do you know how much a property of that type and location would rent for? What is the gross return? London tends to have a low gross rental return and you would be gambling on capital gains.

phatbear

the fact that the sale has gone to sealed bids and you think you have over paid shows there is a market for the flat so why wouldnt that same market exsist in 2/5/10 years?

ruelle

All good points, Helvetica. I guess I'm a bit worried about what will happen to the housing market after the June referendum but of course no one knows what's going to happen!

I've been watching Rightmove like a hawk and I have noticed prices being dropped recently. Not enough to mean that I could suddenly afford a 1 bed in the areas I like though.

davidmcn

ruelle wrote: »

That's what I'm worried about - whether it would be difficult to sell in the future...

Have you checked that you're able to buy it? Many mortgage lenders don't accept studios as security.

Helvetica_Van_Buren

If you rented you'd be paying somebody else's mortgage AND having to save for a mortgage at the same time. Meanwhile the prices of property will continue to rise.

If you bought the property you'd be paying the mortgage off instead. Your property value will rise. In a year or two you can sell it for the increased value or seek permission let your property and use this income towards your next property.