1 bedroom vs 2 bedroom - London Advice

craig88b

Hi all, recently moved to London and been thinking of getting my own place. Chatted with a broker and provisionally approved for 350K plus my 20k deposit.

Still not too sure on which area(currently near Wandsworth bridge and like it but its a bit of a commuting dead zone although I cycle). Hammersmith, shepherds bush, lambeth, borough bermondsey areas seem similarly priced and good for tube stations. Would like to avoid areas that rely on catching overground and tube to get to central/soho area.

Currently thinking a 2 bed apartment is best as they seem about 50k or so than 1 beds more but could possibly rent the second bedroom out for around the 1k mark and be better off cashflow wise. But obviously, that comes with the issue of having to share my space with someone else.

Has anyone else gone through the same question and which route did you take?

jonesydave

If you're using help to buy equity loan you won't be able to rent out another room.

bouicca21

What part of London do you need to get to for work?

silvercar

jonesydave wrote: »

If you're using help to buy equity loan you won't be able to rent out another room.

I understood a HTB loan prevented you renting out the entire property, not that it restricted you from taking a lodger.

craig88b

Currently working in Soho area but it's a contract role so will most likely change over the next few years. Work in finance/accounting so the city area will probably be where other roles end up being.

craig88b

Don't think I'm eligible for HTP as I don't have leave to remain visa yet. But I understood it that you could have lodgers.

Mutton_Geoff

If you can afford (or compromise for) a two bedroom, it puts much less pressure on you for your next move as life progresses. A studio or one bed is much more limiting.


You may need the financial support of a lodger initially but as your salary increases, you may be able to afford to go it alone without the costs of moving to a larger place.


Property is a very illiquid asset, you should try to minimise number of moves as each brings it's own costs and stress.


When I moved from a flat to my first (3 bed) house, I let the other two bedrooms (fortunately to mates who remain so to this day) for the first 3 years until I was financially back on my feet.

snickersbars

Not London - but in autumn last year I had the choice of buying a 1-2 bed flat outright in cash vs a slightly bigger than average (for round here) 3 bed house with the maximum mortgage I could take out on my single income, below average wage. I chose the house option with the plan of having a lodger, as that way there is a) more downstairs space than a flat and b) no moving costs for moving fairly quickly when I would have outgrown a small flat. However, I did make sure that I would be able to afford the house without the lodger - albeit with more frugal living than I would like.

bouicca21

When prices drop or just even out, a one bed or studio is far harder to sell than a 2 bed. If you can stretch to a 2 bed, go for it, but your budget is tight and will probably push you out into zone 4, so you will have to think carefully about transport routes. I’m inclined to suggest that you look for somewhere on the District or Central line, since they will work for both Soho and the City.

Jonbvn

craig88b wrote: »

Don't think I'm eligible for HTP as I don't have leave to remain visa yet. But I understood it that you could have lodgers.

I think that not having ILR will seriously impact the lenders and the rate you will get on a mortgage. I would suggest a engaging a broker and/or consider postponing your purchase until you get ILR.

Given the Brexit chaos, London property will likely fall further in the intervening period anyway, meaning you will likely pay less at a later date anyway.

ReadingTim

craig88b wrote: »

Currently thinking a 2 bed apartment is best as they seem about 50k or so than 1 beds more but could possibly rent the second bedroom out for around the 1k mark and be better off cashflow wise. But obviously, that comes with the issue of having to share my space with someone else.

There might come a time when you want to share your space with someone - maybe even have a baby with them. That's going to be a bit more of a challenge in a 1-bed place than in a 2.

The 2-bed therefore offers a greater degree of future proofing, and given property ownership is for the long term, I know which I'd choose....