First time house purchase and finances. Am I being sensible?

Crashy_Time

Getting_greyer said:

Crashy_Time said:

https://www.rightmove.co.uk/properties/90160118#/
30k price drop so far.

Looks bigger on streetview

The price drop?

Getting_greyer

Crashy_Time said:

Getting_greyer said:

Crashy_Time said:

https://www.rightmove.co.uk/properties/90160118#/
30k price drop so far.

Looks bigger on streetview

The price drop?

No, the inside of the property.  
Maybe only does if using phone, but the streetview is a tour of store.

Crashy_Time

Looks smaller in the video tour, not that impressive really, if some poor soul forked out 350k for this the seller should be breaking out the bubbly IMO.

Dimension_

Thanks for all the comments everyone. I feel much more comfortable about the potential size of my mortgage now, so thank you for sharing your opinions and personal experience. Having spent some time revising my budget and cashflow forecast, i think i was being a little too aggressive and painted an absolute worse case picture - which in hindsight was not realistic. 

For those that have posted links to houses for sale, i have to admit, despite being terrace properties the condition and size of them has really got me thinking about them, so i may view some that i like. The market has really quietened down given the Christmas break and am hoping more properties that tick my boxes are listed in the coming weeks. 

FTB_Help

Good to hear, the ones I posted have all gone under offer now, but hopefully it gave you an idea of what houses are available that fall well under your budget.
Finding detached or semi detached houses in London can be non existence, there is just not the space for it (or look at paying in the region of >£1m). 
Keep looking on RM but don't go in with the aim of beating the SD deadline otherwise you'll end up settling just to save SD

demontfort

I was in a similar financial position to you in 2013 when I was 35. I worked and still work in finance, was on £70k base at the time and bought my first place at 65% LTV. However the numbers were very different, I paid £240k for a 2 bed flat in London and put in approx 80k (about half my savings) and borrowed £160k, in hindsight I wished I had been more ambitious and bought somewhere nicer for £300k. However I have been able to pay down my mortgage quickly, have invested the rest of my savings and got a decent return and then bought a house outside London 2 years ago and kept my flat.

The numbers you are quoting send a shiver down my spine. Putting all your savings in the London property market and maxing out on your mortgage just as we're lurching into a recession is too risky. I'd buy something smaller for about £400k  at 70% or 80% LTV to take advantage of the ultra cheap financing then you'll have plenty of savings left to help pay down your mortgage or make a much easier transition to your next property in a few years. I'm sure working in finance you understand the value of liquidity whereas having all you cash tied up in a house and a huge debt will severely limit your options

keiratea

Apologies if this has already been asked ... but a 35 year mortgage at 34 years old will finish when you are 69 years old.

How confident are you that you'll still be working and earning a similar amount at 69? Wonder if a slightly shorter mortgage might be better even if it means a higher payment?

Crashy_Time

demontfort said:

I was in a similar financial position to you in 2013 when I was 35. I worked and still work in finance, was on £70k base at the time and bought my first place at 65% LTV. However the numbers were very different, I paid £240k for a 2 bed flat in London and put in approx 80k (about half my savings) and borrowed £160k, in hindsight I wished I had been more ambitious and bought somewhere nicer for £300k. However I have been able to pay down my mortgage quickly, have invested the rest of my savings and got a decent return and then bought a house outside London 2 years ago and kept my flat.

The numbers you are quoting send a shiver down my spine. Putting all your savings in the London property market and maxing out on your mortgage just as we're lurching into a recession is too risky. I'd buy something smaller for about £400k  at 70% or 80% LTV to take advantage of the ultra cheap financing then you'll have plenty of savings left to help pay down your mortgage or make a much easier transition to your next property in a few years. I'm sure working in finance you understand the value of liquidity whereas having all you cash tied up in a house and a huge debt will severely limit your options

Yes, liquidity is important in tricky times, a big bubble mortgage doesn`t really cut it as a safety net.

Dimension_

keiratea said:

Apologies if this has already been asked ... but a 35 year mortgage at 34 years old will finish when you are 69 years old.

How confident are you that you'll still be working and earning a similar amount at 69? Wonder if a slightly shorter mortgage might be better even if it means a higher payment?

I agree, a shorter term is better and this would be the intention. The idea would be that i have a 35 year mortgage but overpay an equivalent amount to effectively make it a 25 year term or less. This will provide me with flexibility if i needed it in the first few years. 

Crashy_Time

badger09 said:

Crashy_Time said:

Dimension_ said:

Crashy_Time said:

How safe is your job?

I have never been busier since the pandemic started. I hope that is a good yardstick for measuring my job security. I would say it is highly unlikely that i lose my job but its certainly not a guarantee.

If there was a genuine risk to my job and i lost it, then i think i would rent out the house with the lenders permission and move back home to my parents. 

There are going to be loads of finance jobs lost IMO, income from a house via lodgers or tenants probably won`t be easy or hassle free, why not just cut out the hassle, mortgage and rent payments and move in with the parents now? You would be able to save a load of money and set yourself up to weather any future economic dramas, a mortgaged house is just going to be a lead weight around your neck IMO.

If you'd actually read OP's thread, you'd know he/she is already living with parents. Like most adults, he/she wants their own space. But then, you don't want to answer OP's specific questions, just get your tedious point of view across.

If you are already at your parents in your 30`s the eve of the biggest financial downturn in living memory isn`t the smartest time to move out into a London bubble priced mortgage arrangement IMO.