Studio flat in london, to buy or rent

Chollita

other wrote: »

if i find someone else to live with me, 1 in bedroom, 1 in living room, i would not personally be paying much more than if I were to rent. You'll have to find someone who doesn't mind there not being a lounge to relax in, and both rooms would need to be a decent size, or it would be like living in a box. Also kitchen access would need to be from the hall and not from the lounge, or one of you would be walking through the other's room.

The idea of studio flat was dropped rather quickly earlier in the thread, now we are talking about a 1 bed flat. Have you checked out the difference in price between studios and one bed flats? How much would this increase the mortgage?

re the professional development loans, natwest gave my friend £20,000 who walked in and said she was too annoyed with being poor and wanted some cash so that she could live nicer. They didn't 'give it away. It has to be repaid. With interest. Making your friend even more poor. And somehow I doubt that a bank would provide a loan for such a purpose.

other

Chollita wrote: »

You'll have to find someone who doesn't mind there not being a lounge to relax in, and both rooms would need to be a decent size, or it would be like living in a box. Also kitchen access would need to be from the hall and not from the lounge, or one of you would be walking through the other's room.

Among students, not have a living room is very very common in london, as i said above, plenty have squeezed 3 into a 2 bed flat, and one even has 6 in 1 house with no living room. If they had high expectations of their lodgings to have a reception room, they wouldn't be looking in shepherds bush! Of course there are others who can afford to pay higher rents and have a living room/studio flat/garden etc, but there are many for which a reception room is a luxury. And yes, the property i found has a mini hall way, with access to all 4 rooms, and doesn't require walking through a "bedroom", and of course, they need to be a good sized double bedroom otherwise there's just no point of buying a chicken coop with 2 cells.

Chollita wrote: »

Have you checked out the difference in price between studios and one bed flats? How much would this increase the mortgage?

in this 1 to 1 comparison, the studio was 175k and the 1 bed flat was 160k-not a normal case i assume. Also, a 1 bed flat could squeeze a tenant in to contribute towards the mortgage while i don't really want that in a smaller studio. Plus, after i start work (not confirmed i agree), i will have a living room since i should be able to cover the entire mortgage.

Chollita wrote: »

They didn't 'give it away. It has to be repaid. With interest. Making your friend even more poor. And somehow I doubt that a bank would provide a loan for such a purpose.

Yes, they didn't give it away for free, probably slapped 7% APR for 10 years onto it and she will be tied down for some time. However on a doctors salary she should be able to deal with it, perhaps easier than living on a <8k a year as a student. So yes, she will be more poor (more debts), but her quality of life would have a greater increase than the decrease caused by the debt.

I was surprised that they gave the loan to her considering her reasons, but that was last year.

other

Sapphire wrote: »

I think it's crazy that students are thinking of buying property when they would be far better off in the log run focusing on studying, and generally finding out about the world and themselves. At your age, it didn't even enter my head to own property - I wouldn't have wanted it!

i really dont see how these things are mutually exclusive? studying knowing that you've got a secure and stable home to go to is far better than studying and having a crazy landlord and 5 partying house"mates".

Sapphire wrote: »

You've got your whole life ahead of you to settle down into conformity. Why not enjoy yourself for a few years? Travel, go to parties, experiment with things, etc. Life's too short.

if it is worth it to buy (and have a lodger), then my money will be able to extend to these things. if it is actually more expensive to rent in my case, then i probably won't be doing any of these exciting things for a while.

Sapphire wrote: »

Do you not read newspapers and journals, or this forum regularly? Doesn't the state of the economy concern you, in that there is a strong possibility that things in this sphere will not go well during the next few years? I remember the last HPC (in London), and it was grim. This time around it could be much worse, given the totally insane rise in house prices, and the amount of debt people have got themselves into.

I would be very careful.

I don't remember the last HPC in london, so maybe i sound very unrealisitic. I am being careful, hence my posts talking about my point of view and seeing what other people have suggested based on their knowledge and experience. No where have I actually handed over any money to start buying, I am merely doing the market research.

I am no expert in the economy, but from what i've read and seen, there are experts standing on both sides of the fence. Generally i agree it might be a bad time to buy as an investment, since prices are so high now, and rental yields are not as great as 10 years ago. However, what I am trying to get at is whether it is worth it to buy in my particular circumstances-live in for 2 years definitely, and probably continue to do so into the future-compared to renting for 2+ years and then buying. Yes there might be a HPC, but maybe i've just naive, but how far can a 160k 1 bed flat fall to?

beingjdc

other wrote: »

Yes there might be a HPC, but maybe i've just naive, but how far can a 160k 1 bed flat fall to?

If the crash were the same as the last one, peak-to-trough, in nominal terms, and the flat fell by the average, then £129k.

If the crash were the same as the last one, peak-to-trough, in real terms, and inflation remains at 3%, then £119k.

If the crash were to result in a return to trend growth, centred on 2001, 1990, and 1986, then £109k.

If the crash overshot trend growth by the same amount as the 1990s crash, then £79k.

If the people trading on Cantor (i.e. making predictions and putting their money where their mouth is) are right, then £148k (with the spread between £146k and £150k).

Personally, more than 20% would surprise me, but it all depends on the impact on the wider economy and all sorts of imponderables. Prices might even go up, who knows!

lynzpower

other wrote: »

I am no expert in the economy, but from what i've read and seen, there are experts standing on both sides of the fence. Generally i agree it might be a bad time to buy as an investment, since prices are so high now, and rental yields are not as great as 10 years ago. However, what I am trying to get at is whether it is worth it to buy in my particular circumstances-live in for 2 years definitely, and probably continue to do so into the future-compared to renting for 2+ years and then buying. Yes there might be a HPC, but maybe i've just naive, but how far can a 160k 1 bed flat fall to?

Im not being funny mate, but what have you seen, seriously for 160k in West London?

Ive checked RM and this is the crop:
2 bed maisionette in Hayes http://www.rightmove.co.uk/viewdetails-9095850.rsp?pa_n=1&tr_t=buy

http://www.rightmove.co.uk/viewdetails-8504746.rsp?pa_n=1&tr_t=buy I bed seemingly concrete build in a high rise ( practically unmortgageable)

So, not only do you not have an actual budget ( given that no one will give you a mortgage on *a salary you havent even qualified to think about earning*)

but there also isnt anything within your actual budget anyway.

I dont get this waht have i missed?

roses

If you are so insistent on buying a house then I would get somewhere in zone 2 where you get a bit more for your money than W6.

rainbowtrout

LOL a doctor's salary really isn't that great...my friends starting next year are looking at starting salaries of 25k (you might get a bit more for being in London). The new European working hour regulations have cut junior doctors pay by at least 5-7k a year as we are now limited to 48hrs a week. If you want money switch to Economics now, you get to start earning three years earlier AND get paid more

Also are you planning to live in the flat after you graduate or sell? This is important as you might be very unsettled for quite a few years after qualification. Junior doctors rotate through regional hospitals, I don't know which hospitals are in your deanery but potentially you could be sent 100 miles from where you live.

other

rainbowtrout wrote: »

LOL a doctor's salary really isn't that great...my friends starting next year are looking at starting salaries of 25k (you might get a bit more for being in London). The new European working hour regulations have cut junior doctors pay by at least 5-7k a year as we are now limited to 48hrs a week. If you want money switch to Economics now, you get to start earning three years earlier AND get paid more

Also are you planning to live in the flat after you graduate or sell? This is important as you might be very unsettled for quite a few years after qualification. Junior doctors rotate through regional hospitals, I don't know which hospitals are in your deanery but potentially you could be sent 100 miles from where you live.

total gross salary+extras for first year doctor in london was 35k, in one case. Dunno how expectional that was though. http://www.bma.org.uk/ap.nsf/Content/DDRBfact20078

I am planning to live in the flat after graduation, however if it is unfeasible-i get posted to isle of wright, then i will rent it out (or attempt to; the nay sayers).

potentially i could be sent 100 miles from where i live, potentially i could be made redundant, potentially a tree could fall on my house that i haven't yet insured.

re the figures about the housing crash, thank you for providing the data, i suppose they are quite large sums however i can't see prices dropping 20%+, but still a very real danger.

to lynzpower, why did you say that flat was unmortgagable? What do you mean? Yes i have found a 160k 1 bed flat, in a concrete ex council high rise. Obviously that may not the perfect pad, hence the price. Apart from that i haven't gone into the details, since there would be no point me viewing it etc if it was deemed such a bad idea to even consider buying it! No i have no budget at the moment, but a mortgage with parents as guarantors and my student loan (which would otherwise have gone on rent anyway) might stretch to 160k at a rough estimate. Of course this is not guaranteed.

to roses, i am looking in zone 2 already.

and to everybody who are saying that no one will lend to me
http://www.whatmortgage.co.uk/ccstory/64744/58/Buy-for_uni_mortgages_offer_many_options.htm

http://www.bibs.co.uk/Mortgages.aspx?SubId=26

fine, only 1 lender at the moment, and obviously will have high requirements (as well as hoping they can make the parents and kids homeless in some cases) so stop worrying about how i will buy it, and lets talk about is it a good idea to buy this particular case in the current climate.

Bargain_Rzl

other wrote: »

to lynzpower, why did you say that flat was unmortgagable? What do you mean? Yes i have found a 160k 1 bed flat, in a concrete ex council high rise. Obviously that may not the perfect pad, hence the price.

Concrete builds are not easy to get a mortgage on because it's not structurally as good as brick or other "standard" construction.

Buildings over 12 storeys (?) are also harder to get a mortgage on.

You are likely to find yourself needing to pay a high-percentage deposit, that's if you can find a lender to take it on at all.

lynzpower

When I was an EA there were only a handful of lenders that would lend on high rie of concrete construction. One day, HSBC stated that they now wanted 50 LTV ( ie youd need 50% cash deposit) I read the other day on the mortgage board that more lenders have restricted on his even further.

I would ask on the mortgage board to be honest, who will lend to you using a loan as payment - believe me not many lenders will- debt funding debt is looking much less likely these days with the credit crunch and quite rightly so. And on a concrete, I tihnk your chances are slim to none.

We can all talk about buying in this climate. The general rule is yes, there is some cooling happening. Whether this wil amount to a full blown crash is crystal ball time and there are STACKS of posts on this.

I dont think its a question of IF you should buy in this climate- I seriously dont think you COULD.