Buy a flat in London now or wait?

leypt1

There's a lot out there for your budget! Over 400 results on rightmove, even once you factor in gardens as a must have:
https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^87490&minBedrooms=1&maxPrice=280000&propertyTypes=&mustHave=garden&dontShow=newHome,retirement,sharedOwnership&furnishTypes=&keywords=

My top tip as a fellow London FTBer is, don't discount places just because they feel too far out - lots of places have surprisingly good transport links or nice local amenities (e.g. croydon).

Having said that you'll be able to get something in the fun bits of South east London (Camberwell, Bermondsey, New Cross etc.) on your budget, especially if you consider ex council flats. As others have said, there'll be big major works charges, but with a large ongoing income that should be less of an issue for you than raising the deposit needed for an equivalent non-LA flat.

leypt1

Anyway to answer your question, I'd say buy soon. We had a similar dilemma when everyone was telling us to wait as prices would fall soon, but they've actually gone up a lot this year.

Our purchase has just fallen through and it's shocking to see how much we've been priced out since we last stopped our search 6 months ago. With the amount of effort the govt is expending on inflating them further, I'm not sure how soon that will change. 

RoisinDove

FTB_Help said:

RoisinDove said:

FTB_Help said:

Im a few years younger than you Rosie.

Me and my fiance are really lucky to be earning fairly well so are able to stay in London (i grew up in Hackney, he grew up in upton park - both areas were horrible 25+ yrs ago) but we both love London and are buying in London (zone 3).

I really cant see myself wanting to leave the city but i see what some posters mean about having kids grow up in certain areas (Kennington isnt the nicest but hey, me and my fiance grew up in similar areas and we turnt out ok!)

There's lots of places in London that arent terrible such as Bermondsey (nx door to London bridge) which is affordable for you.

In terms of meeting someone, maybe you'll get a bigger chance in London as it is a bigger city, not everyone our age are party animals and anyone who assume otherwise probably don't know London well or a much older generation thinking.

People telling you to buy a family home now outside of London, doesn't quiet make sense to me, you've not met a partner yet and family homes are probably best picked out together in an area you both like.

Plus i def recommended you staying near friends/ family.

Most people our age living in London now do want to settle down and raise kids here, not just eat take aways and party!

Jump on a bus during the weekend and visit different parts of London to explore different areas, some may pleasantly surprise you.

Yep indeed...it doesn't seem to make sense to buy something for a lifestyle I 'might' have or want, rather than the one I have now. I imagine it would be much harder to meet people in a small commuter town or village due to far fewer people. I had been looking at places like Reading and villages near it, where I'd be able to get a nice 2-bed flat with parking and outside space, but I think it might impact on my quality of life...I wouldn't want to start thinking 'oh I'd love to go to that show/film/concert, but it would be a hassle to get home late at night' etc. I feel like being in London itself (or Brighton) would make it way easier to meet new people and have an active social life. 

I feel like my budget is maybe that bit too small to get something I really love...I think if I could push it up to 300-325K, I'd have way more to choose from, but then if I wait another year to buy (saving more money and aiming for a small pay rise, maybe), that's another £15,000 or so down the drain on rent. My dad made the point that I've spent the last two years living in a one-bed flat in London, paid £30,000 in rent, and have nothing to show for it. He thinks I should just buy asap and start putting equity into a property I'll own, even if it's not my dream home or anything close. It just feels like such a big step to buy somewhere!

Agreed, your life style sounds just like mine! It seems you love to be able to

-hop on the tube/ Bus on the weekend to an event/ show/ meet up w/ friends/ family and socialise

-be near the hustle and bustle in London

-enjoy the multi culturalness that is London

-be able to be spontaneous and go to that last minute get together with friends after work without dreading that 1.5 hour train home afterwards.

-be close to family/friends

If so i do think London sounds right for you right now, especially if you do want to stick around for 5 yrs.
If you do buy now (probably a 1 bed flat in London) your dad is right, yes you will be putting equity in your own property.

In a few yrs time, you might meet someone and decide its too small for you both, so all you do is sell and buy somewhere bigger together.

I can give some pointers in areas: Bermondsey, Walthamstow, Harringay green lanes, all areas have great travel links, lots of street food stalls and markets in the area and decent high street and should be in your budget.

Keep saving and spend a few hours each weekend in different parts of London to get a feel for the area.

When the SD holiday ends in June (and the tampering in Sept) you might find prices may fall slightly (my speculation)

Yep, that's exactly it! I also go to the continent a good bit (I used to live in France and have friends in the Netherlands) so being a short tube ride away from the Eurostar at St Pancras has been a massive plus of London for me over the past few years. Have looked in those areas you mentioned - seen a few places that look OK, but obviously in my price range will be mainly very small flats in purpose built blocks. Not necessarily bad, I guess, if I'm focusing on location and being able to get around easily! It's hard to get a feel for different areas in lockdown but I'm looking forward to heading to a new area once things open up, having a coffee and nosying around the shops and cafes in the area and seeing what the transport links are like in practice!

I was a bit unnerved by some posters saying I would hate a flat that was <280K and I thought maybe I was deluded thinking I can get something on this budget, but I've spent the last few years happily living in one-bed London flats for £1200 a month. If I can get something at least as good as the place I'm renting, but be building equity rather than giving that money away to someone else every month, it seems like a reasonable idea?

AnotherJoe

RoisinDove said:

steampowered said:

Out of the box option: You could consider moving out of London? £30k would be a fine deposit elsewhere in the country, even if your salary is lower.

In this age of record low interest rates, buying is generally a good idea if you intend to be somewhere long term. Few years plus. But, if you get it wrong, buying can also be a depressing waste of money, and can make you feel trapped in a property you don't want to live in.

If you are happy to live in the flat for the next 5 years, buying probably makes sense. 

As you are a first time buyer, personally I would hold on for a year or so, as prices in London are likely to soften when the stamp duty holiday comes to an end. The stamp duty holiday doesn't benefit you because you will qualify for first time buyer stamp duty relief.

In the meantime, make the most of Lifetime ISAs. You can pay in £4,000 into a Lifetime ISA each tax year. The government will then add a bonus of 25% when you use it to buy a property - worth £1,000 a year.

I have considered moving, but not sure where would work. I'm already feeling a bit shell shocked with the pandemic and a relationship ending last year, and wondering if a move to a new city away from the little support I have here would be a bit much. I have considered Brighton, as it's close enough to London that seeing my friends and doing stuff would be possible, and it's also an interesting place in its own right. Looks like I might be able to get quite a nice flat there within my budget, compared to what I can get in London, but not sure how likely it would be to hold value, etc.

I think if you are only going into the office once a week, Brighton would be a far better place to be the other 6 days of the week, its a great place to meet people from what I've seen, and its more likely to hold its value / rise than a nondescript London place, after all you've got two sets of peopel who woudl move there, people like you, and people looking for  a second home. 

I know many people whose work is shifting to mostly home based plus theres plenty of stories about this as well. I think the exodus has only just started.

RoisinDove

numbercruncher8 said:

Something I may have missed, where are you living now and what areas of London do you like?
Two people can live in different places in London and have much different tastes; thus different areas would be suited to them. 

I guess what steampowered is saying, is that once the stamp duty ends, the costs come back in which puts a downward pressure on prices as people then have a large up front cost. This may or may not happen. By going early you miss out the chance of prices falling, but the flip side of that is that you are also insulated from further price rises. But that has not been the trend in London for a while.

I'm in east London now, in Clapton. Happy living here, but it's gone very expensive because it's 'trendy', so don't think I could afford to buy here. The closest areas to here that I think I'd like living in, and can afford something, are probably Leytonstone and Walthamstow. Maybe Leyton as well, although it's not quite as 'nice' as the other too. The nicest flats (as in not shoebox looking ones) seem to be in South London but I don't know the areas well down there, so I'd have to go and have a good look around first. I should have the 28K together (10% deposit on 280K flat) by about July, so that's probably the earliest I can consider buying, unless I find something cheaper!

RoisinDove

seradane said:

Only point I'd add OP, if you're concerned about being able to move away/rent it out in future, is just to avoid any shared ownership type offers. They often have restrictions on leasing them out, and that's when people get stuck when life situations change. 

Yep, am definitely avoiding all those. They seem overpriced and stressful. I'd prefer to just buy something 'normally', even if it isn't quite as nice. 

numbercruncher8

RoisinDove said:

numbercruncher8 said:

Something I may have missed, where are you living now and what areas of London do you like?
Two people can live in different places in London and have much different tastes; thus different areas would be suited to them. 

I guess what steampowered is saying, is that once the stamp duty ends, the costs come back in which puts a downward pressure on prices as people then have a large up front cost. This may or may not happen. By going early you miss out the chance of prices falling, but the flip side of that is that you are also insulated from further price rises. But that has not been the trend in London for a while.

I'm in east London now, in Clapton. Happy living here, but it's gone very expensive because it's 'trendy', so don't think I could afford to buy here. The closest areas to here that I think I'd like living in, and can afford something, are probably Leytonstone and Walthamstow. Maybe Leyton as well, although it's not quite as 'nice' as the other too. The nicest flats (as in not shoebox looking ones) seem to be in South London but I don't know the areas well down there, so I'd have to go and have a good look around first. I should have the 28K together (10% deposit on 280K flat) by about July, so that's probably the earliest I can consider buying, unless I find something cheaper!

OK I understand. It is quite expensive there.
If you'd like to stay east I could recommend South Woodford, this place appears well within your budget, although maybe a bit small. 

But, accessible enough to London and there is/was a reasonable (not massive) amount of nightlife with a few bars dotted between there/Wanstead/Leytonstone, although I would guess whether you like that might depend if you are an 'old' 35 yr/old or a 'young' one. 

poolboy

London landlord here, I used to live and work in London so know the market pretty well.  I left the area so bought a flat in case I ever wanted to return.  That was 15 years ago, it has let continuously just the odd week void.  Then about 10 years ago I bought another, for me as I fancied having a base there.  That one has let continuously to the same person.  Regulations now you need energy, elec certificates and gas.  Be aware of capital gains too as over 10 years i reckon they put on 50%,  a work colleague told me ages ago....always keep a flat in the capital.  The price trajectory may be a bit of a rollercoaster but good flats in nice areas will always let and sell well.  Mine are in sw London, leafy outlook, close to transport, private parking.  You pay more but they are nice flats, lots of light, good configuration, private parking.  1 beds start at 325k though.

FTB_Help

Personally i wouldn't go in with the intention of renting it out down the line, its just too much faff.

The one numbercruncher linked is lovely.

I really like Wanstead, i went there last summer to view different areas and it had a great high street (gails bakery too 🤤) and its on the central line less than 20 mins to liverpool street, put this area on your list.

Im sure there will be others on this forum that can give you pointers on other areas.

Come 17th May, i say get out on the bus/ tube and walk the areas to really see it for your self.

On 55k and rent 1.3k, you should be left with about 2k before other bills, so if you can put away 1.4k/ month, you could save another 10k by sept

RoisinDove

leypt1 said:

There's a lot out there for your budget! Over 400 results on rightmove, even once you factor in gardens as a must have:
https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^87490&amp;minBedrooms=1&amp;maxPrice=280000&amp;propertyTypes=&amp;mustHave=garden&amp;dontShow=newHome,retirement,sharedOwnership&amp;furnishTypes=&amp;keywords=

My top tip as a fellow London FTBer is, don't discount places just because they feel too far out - lots of places have surprisingly good transport links or nice local amenities (e.g. croydon).

Having said that you'll be able to get something in the fun bits of South east London (Camberwell, Bermondsey, New Cross etc.) on your budget, especially if you consider ex council flats. As others have said, there'll be big major works charges, but with a large ongoing income that should be less of an issue for you than raising the deposit needed for an equivalent non-LA flat.

Thanks - this makes me feel more positive! Bermondsey seems like a good bet in terms of being very close to central, with loads to do. I've seen some places there within my budget, just a little concerned about safety in those ex-council blocks with the pedestrian walkways and covered stairs, and they all seem to be designed like that!