Larger/nicer house in worse area or worse/smaller house in nicer area?

bp5678

I'm looking to buy my first house in Newcastle. I'll be buying alone as I'm single. Looking at around £150-160k.

If I choose one of the nicer areas, I could afford a 2 property (possibly a house or flat).

If I chose somewhere that's a little dodgier (I'm not talking the roughest part of the city don't worry), then I could afford a 3 bed house/luxurious flat.

Although I currently live with my parents in a nice suburb, I'm the sort of person who's more than happy to be in a worse part of town to save money (as long as I'm not going to get my car/bike broken into/stolen or house burgled!).

I read from a BUYING point of view over renting, the area you live in is important for sell on value though as well as generating demand for the next buyer. If I were renting I'd choose the worse area to save money but since I'm buying the area is a factor.

However from another perspective, if I moved into a 3 bed property, I could rent out the other 2 rooms meaning I could pay off my mortgage much quicker.

It also means I can save money on food, petrol etc etc as the poorer area's shops are more affordable.

I value a nice spacious house quite highly too.

I'm trying to look at this perspective from a financial perspective as well as a personal point of view (i.e will i like living there). I think I'd be more miserable in a less desriable and smaller house in a nice area than a nice/larger house in a worse area.

Lastly flats are cheaper meaning if I chose this option I'd get better bang for my money (and luxurious flats are often super nice). I've read on this forum that most people advise a house due to things like noise in a flat. So now I'm also indecisive here.

Alter_ego

You can usually improve/extend a house, but it's difficult to improve an area.

spadoosh

Buy the worst house on the nicest street is the saying.

Id avoid flats too. They dont resell well, theres inevitably an increased likelihood of neighbour issues, restricts the sell on market quite a bit.

In all likelihood youre not going to pay off the mortgage on this house, youll move somewhere else and pay that mortgage off. In all likelihood during the term of your mortgage your circumstances will change leading you to buy something else. So i wouldnt worry too much about paying the mortgage back sooner with the increased income from lodgings, plus its one extra person to do your head in. If you need ot rent out a room to help cover the costs, then youre putting yourself in a position of need which isnt advisable.

need_an_answer

I would opt for the better area and see if my budget stretched to a 3 bed dooer upper......

bp5678

spadoosh wrote: »

Buy the worst house on the nicest street is the saying.

Id avoid flats too. They dont resell well, theres inevitably an increased likelihood of neighbour issues, restricts the sell on market quite a bit.

In all likelihood youre not going to pay off the mortgage on this house, youll move somewhere else and pay that mortgage off. In all likelihood during the term of your mortgage your circumstances will change leading you to buy something else. So i wouldnt worry too much about paying the mortgage back sooner with the increased income from lodgings, plus its one extra person to do your head in. If you need ot rent out a room to help cover the costs, then youre putting yourself in a position of need which isnt advisable.

Thanks. Yes that saying was kind of the motto I was originally going with but recently I've had a slight change of thought hence me asking the question on this thread.

Similarly I also heard what you said regarding flats. I think the fact that most people are saying the same thing speaks volumes and I should probably listen to the majority!!

I'm keen to stay in my first property for a while as there's obviously the costs associated with moving/remortgaging (eg no stamp duty on first house under £300k). Even if I don't pay off all the mortgage on my first house I'd like to pay off as much as possible since it's compound interest.

Obviously the 1 or 2 lodgers (depending on if its a 2 or 3 bed house) may do my head in but may also be amazing/get on well. I know there's apps/websites where I/they can look to stay with people with similar interests/personalities/way of life to one another.

bp5678

need_an_answer wrote: »

I would opt for the better area and see if my budget stretched to a 3 bed dooer upper......

Do you mean a 3 bed top floor flat?

elsien

I'm not always convinced by the worse house in a nicer area argument - it really does depend on what you mean by a worse area, and in comparison to what?
I went for a less good area, it's been fine for me, and houses still sell well here so I don't have any concerns about selling if I do need to move.
You need to look at how much of a market there is in your worse area for the type of house you are buying, then whether the area is likely to go further down hill. If the area is stable and houses are selling, I'd probably go for more space. But that's my personal preference.
I often hear people on here saying single people don't need a 3 bedroom house - I may not need it but I've still managed to fill and all the space is used.

hazyjo

spadoosh wrote: »

Buy the worst house on the nicest street is the saying.

Was going to say the same. Along with the three most important things when buying a home: Location Location Location (as the TV show title goes too).

I would go for a freehold 2 bed house in a nicer area in your shoes.

The Rent a Room scheme is an optional scheme open to owner occupiers or tenants who let out furnished accommodation to a lodger in their main home. It allows you to earn up to £7,500 a year tax-free, or £3,750 if you're letting jointly.

Read all of this current thread before deciding on lodgers, let alone two! Might be a consideration though to rack u some cash/pay the mortgage down https://forums.moneysavingexpert.com/discussion/5967817/when-how-to-kick-out-a-nightmare-lodger

What sort of rents though? Under the rent a room scheme, you can earn up to £7,500pa - that's not per lodger.

I doubt the poorer area is cheaper on food, petrol etc. You'll be better off in a supermarket or getting one to delivery. I've always found 'local shops' to be pricey anywhere you are.

Flats are generally cheaper, but don't forget expensive service charges - anything 'luxurious' is likely to have a hefty one! Plus once a lease gets under about 85 or so years left, you need to think about renewing. That will cost thousands or tens of thousands depending on how low it gets. Not a concern with a freehold house.

Look at RM and come back and maybe ask for advice when you've found some comparisons. It sounds like you will be seduced by nice decor where you really should be noticing things like 'where will I fit a wardrobe' or 'there's no window in that bedroom!'.

Good luck!

babyblade41

another here for worse house in a good area but if it's long term , well as much as you can pin for long term

If it's not then I would do the other and go for larger in the less desirable area.

Reasons : worse house in a good area as renovations cost and it takes time ... I've been in my present house for 6 months and not a brick laid yet

Jox

Nicer area definitely!

need_an_answer

bp5678 wrote: »

Do you mean a 3 bed top floor flat?

no I mean a run down house that requires a bit of work to modernise it

At the end of it you could end up with a house that's a good size in an area that's also nice.