First purchase - go for flat or stretch to a house?

TDH_91

Age 26, currently considering going for a flat or stretching to a house. I can purchase up around £420k with a 15% deposit.

In the areas I'm interested, flats go for between 300-375k. Houses start at 390k in bad areas, but in equivalent decent areas they will be at least 400k for a 2 bed and 3 beds will be around 420k which need work. 
I would like a house, but I am not sure if I should stretch myself that much given I am buying alone. Flats do appeal in some ways given they are cheaper, however dealing with leaseholds, checking if the flat is affected by the cladding issues, bad neighbours etc etc. seems like a massive pain in the !!!!!!. It's obviously also harder to add value to a flat. 

None of these will be my forever homes, however I could probably stay put longer in a house - though with a flat I would have the option to keeping it and renting it out whilst buying my next place (salary expected to increase). It'd be harder if I were to buy a house as they are dearer. 

dimbo61

Cladding on a house ?
Flats may have cladding but 98% of houses don't.
£420K would buy a 4/5 bed detached house with double garage and large garden round here so maybe down South or London ?
House every time.
Your looking for a home first not an investment.

El_Torro

I think this largely comes down to personal preference. Personally I’ve always bought flats as I prefer them to houses. If you don’t like the downsides of living in a flat though why buy one?

Since this is the MSE forum I’d just like to add that you should be careful not to put all your available money into a mortgage whilst ignoring your pension and other investments. No point living in a mansion if you have no money with which to retire.

TDH_91

London, sorry meant cladding on flats. 420k buys a 2 bed or a 3 bed with work required.

steampowered

Personally I would go for the more expensive property. You are more likely to want to stay in the property longer, which is better for the long term.


The mortgage lenders won't let you overstretch. You can typically only borrow up to 4.5x - 5x your salary which is fine.


It sounds like you have a £63,000 deposit and can take up to a £357,000 mortgage - which means you earn a salary of £75k or so. With that sort of salary you do have plenty of leeway to continue paying the mortgage even if your income was to decrease.

RAS

2 bed or more means you can rent a room. Tax free income. 

And do check the management fees for flats.

TDH_91

Houses will be similar to property-83272967.html in right move, so I would have very little left if I did decide to go for one

[Deleted User]

26 and earning approx 75k....nice! What do you do?!

I'd go for a flat given your age

Beeboo23

TDH_91 said:

Houses will be similar to property-83272967.html in right move, so I would have very little left if I did decide to go for one

From what you’ve said you’re the same age as me and we make similar amounts of money. I’ve decided
to go for a house over a flat because I’d want to stay there longer. If you want to go for a house is it possible to stay where you are for a bit longer and save up a bigger deposit so you’re not too stretched on the mortgage? I have borrowed significantly less than the bank would lend me but houses are cheaper up north. I have friends in my position who have stretched to the very top of their budget and I have watched them be eaten alive by huge mortgage payments and bills and struggle to keep a float. Don’t forget to account for council tax, gas, water, electric, internet, general repairs etc when working out what you can afford. They thought the jobs were 100% secure but they’ve ended up in a huge house eating beans on toast every day and super noodles not being able to sleep at night. I’ve gone for a much cheaper house on the basis that there’s much more wiggle room should something happen. So my advice would be if you’re going to be stretched wait and save up more if you want a house. If you’re happy with a flat maybe that’s a better option if they’re cheaper. 

iampetesmith

For me, I went for the biggest I could comfortably afford as I intend to stay there. We have one toddler at the moment, but I bought a 3 bed house with decent sized bedrooms as we want another kid in the future, which means the house is big enough so that we don't have to move again.

If you buy somewhere, it's best to stay in it for a while so consider the size you'd need in the future.

[Deleted User]

Consider the running costs of houses because they'll be far more numerous than a flat (obviously !)
So on your pro's and con's list - decide whether you'd like your monthly disposable income going on larger scale maintenance or pleasure etc. this needs to be thought through.