Buy a flat in London now or wait?

RoisinDove

AnotherJoe said:

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.

Yeah, Brighton is looking more and more appealing. Being on the coast is a massive plus for me, and it would definitely be preferable to buying in one of the very far out areas of London like Abbey Wood. Just a bit wary of buying in a place I barely know at all. And also have a bit of concern that I might not always be able to work at home most of the time (for example, if I change jobs, or my work decides to bring us back in at some point) and then I'm looking at a huge commute. Probably quite unlikely though. 

AnotherJoe

RoisinDove said:

AnotherJoe said:

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.

Yeah, Brighton is looking more and more appealing. Being on the coast is a massive plus for me, and it would definitely be preferable to buying in one of the very far out areas of London like Abbey Wood. Just a bit wary of buying in a place I barely know at all. And also have a bit of concern that I might not always be able to work at home most of the time (for example, if I change jobs, or my work decides to bring us back in at some point) and then I'm looking at a huge commute. Probably quite unlikely though. 

Obviously everything is uncertain to some extent but Brighton has always been a popular place. If the London housing market booms, that would also help Brighton and if the London exodus continues, that also helps Brighton. There's a LOT of London housing waiting to be soaked up given all those companies relocating or de-emphasising working in the office 5 days a week. Yes there is a market, but to me somewhere just an hour away but on the coast has got to be more attractive .Was it BP who said last week they are moving to 2 days a week? There will be many companies like those. My ex-bosses company has not taken up the option to renew the lease on their London office, instead its rent an office to meet customers ad hoc,  and a monthly rented office for internal get togethers.

Do try, if you can afford it, to get somewhere where there is an study/office even if its just a demarcated space or a repurposed broom cupboard .

RoisinDove

FTB_Help said:

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

It definitely wouldn't be my intention to let it out. I just don't want to be trapped here if I get a good job offer abroad. This is the main thing that's stopping me buying. But that means holding out and paying more and more rent for a 'maybe' scenario, which my dad thinks is silly. 

I like Wanstead too - pretty expensive though, isn't it? Quite a well to do area. Unfortunately, I'm on far less than 2K after rent - I still have student loan repayments (it took me many years to get this salary after graduating into the 2008 crash, so started repaying late) and significant pension deductions, so 1K is about the most I can manage to save, even if I buy only essentials  

f1_Fan

Have you thought about shared ownership ?
That's what I've done.. in a similar boat as yourself and can't afford anything within the hustle of London and not wanting to be as far out as zone 4, so found the shared ownership scheme. I hoping to move into my 2 bed in Bromley-by-bow. I think the scheme works well in London as there should always be a demand and as long as you know what you're getting into and got the cladding sorted as gives you a chance to get on the ladder... and who knows you may end up being able to staircase to own the full 100%. 

annetheman

Just popped in to see if Crashy had arrived yet.

We seem to be safe. OP, you're asking a lot of the questions I had before I decided to bite - I bought shared ownership of a 2 bedroom flat alone. Purpose being lodger rental potential should I need it and room to grow - I would say in our region, it is neigh on impossible to buy alone without some sort of scheme be it HTB or SO. Not unless family give you big big big bucks or you wait until mid-40s. At 30, it seemed a sensible gamble for me to go into it alone.

So far, so good! Of course, in my profession (pharma) and at my stage in my profession, there is the real possibility I could need to do a year in the global offices or another affiliate; but it's not a big enough 'problem' for me to wait until average 2 beds are half a million or whatever.

The what ifs for me never came to outweigh the downsides of not starting to build equity whilst I can - there is no guarantee I will be able to even 6 months from now. 

Make whatever decision is right for YOU, many people will tell you not to touch SO or a flat or buy in London or this or that. If it's right for you, buy a cave in Fife! 

Alan2020

I find this thread comical, in the inner zones of London £300k will buy a flat where you can exist. 

Many of these people haven’t lived life. It reminds me of someone who asked me to help a friend buy a property mortgage free out of an inheritance. So I found 2 houses one to rent out and the other to live in all bought mortgage free. Anyway this person didn’t like it and asked me to come and view a flat in London. I genuinely feared for my life in this ex la flat, but this person bought it. Absolutely grotty, the irony was she said she loved the London lifestyle- I didn’t want to be cruel and point out she had an existence style.
Lifestyle in most suburbs of England is something achievable at about an income of £30k as a single person, in London I put it at about £120k

If anyone sits in the tube and look at peoples eyes, they are all sad - as my friend once eloquently put it, London is the city where dreams are broken 

RoisinDove

f1_Fan said:

Have you thought about shared ownership ?
That's what I've done.. in a similar boat as yourself and can't afford anything within the hustle of London and not wanting to be as far out as zone 4, so found the shared ownership scheme. I hoping to move into my 2 bed in Bromley-by-bow. I think the scheme works well in London as there should always be a demand and as long as you know what you're getting into and got the cladding sorted as gives you a chance to get on the ladder... and who knows you may end up being able to staircase to own the full 100%. 

I would rather avoid shared ownership as I understand it would be much harder, if not impossible, to rent the place out if I had to move, and also harder to sell. It also seems a lot more expensive in the long run, with having to pay rent as well as a hefty mortgage repayment...the places I saw were something like £850 mortgage plus £650 rent, which is unaffordable for me, really. Did you manage to find something cheaper?

RoisinDove

annetheman said:

Just popped in to see if Crashy had arrived yet.

We seem to be safe. OP, you're asking a lot of the questions I had before I decided to bite - I bought shared ownership of a 2 bedroom flat alone. Purpose being lodger rental potential should I need it and room to grow - I would say in our region, it is neigh on impossible to buy alone without some sort of scheme be it HTB or SO. Not unless family give you big big big bucks or you wait until mid-40s. At 30, it seemed a sensible gamble for me to go into it alone.

So far, so good! Of course, in my profession (pharma) and at my stage in my profession, there is the real possibility I could need to do a year in the global offices or another affiliate; but it's not a big enough 'problem' for me to wait until average 2 beds are half a million or whatever.

The what ifs for me never came to outweigh the downsides of not starting to build equity whilst I can - there is no guarantee I will be able to even 6 months from now. 

Make whatever decision is right for YOU, many people will tell you not to touch SO or a flat or buy in London or this or that. If it's right for you, buy a cave in Fife! 

Who is Crashy?  
Yeah, this makes sense. My original goal was 'buy before 40', but it seems silly to keep paying rent for the next 4-5 years and slowly saving (as house prices maybe go up faster than I can save) if I could buy a place, pay the same on mortgage repayments as I would on rent, and then hopefully sell and upgrade (or at least have gained equity in my own home). will you be able to let your home out if you have to move for work?

OldMusicGuy

Just saw this. Our son is looking to buy his first place. Currently renting in SW9, works in central London but can work from home as much as he wants. Budget is around 300K and that doesn't get much in London. He's realised during lockdown that a tiny flat does not make a good long term living environment. He's currently looking at Brighton as we all think it will be ideal for him. He can get some nice places in great locations within his budget.

The advantages of Brighton are that you have a lively, vibrant city with all kinds of activities and facilities on your doorstep. Great for a social life away from work. The cost of commuting will be an issue but he won't be going in to London all the time. 

Now we are biased because we have ties to the area, my wife and I both lived in Brighton and I grew up in the area. I commuted daily from Brighton to London for many years and it's an easy commute. You always get a seat at the Brighton end, and trains run most of the night so it doesn't stop you socialising after work in London. Easier (and safer) to get home after a night out than many places in South London. 

We lived near Reading for many years. I wouldn't move there unless you want to settle down. There's not much going on in Reading (compared to Brighton). And it's nowhere near as vibrant and culturally diverse. Also, Brighton has a much better football team and stadium (although that may not be a consideration.....).

Best of luck.

RoisinDove

Alan2020 said:

I find this thread comical, in the inner zones of London £300k will buy a flat where you can exist. 

Many of these people haven’t lived life. It reminds me of someone who asked me to help a friend buy a property mortgage free out of an inheritance. So I found 2 houses one to rent out and the other to live in all bought mortgage free. Anyway this person didn’t like it and asked me to come and view a flat in London. I genuinely feared for my life in this ex la flat, but this person bought it. Absolutely grotty, the irony was she said she loved the London lifestyle- I didn’t want to be cruel and point out she had an existence style.
Lifestyle in most suburbs of England is something achievable at about an income of £30k as a single person, in London I put it at about £120k

If anyone sits in the tube and look at peoples eyes, they are all sad - as my friend once eloquently put it, London is the city where dreams are broken 

Where do you suggest I live? I have considered other cities, but a life in a small town or suburb would be 'existing' for me. I looked at Crawley at the suggestion of an acquaintance, but what would I do there as a single women with no kids, and no support network nearby? She loves it there because her main social outlet is mum and baby groups, and for 260K she was able to buy a 3-bed semi with a garden for the kids, and her husband can commute to work in London. I agree - I would also like to live there if I were in her position. It's a good place for people with families. I think I would spend all my time going to either London or Brighton, and my lifestyle would be curtailed by having to always worry about train times and the expense of them. 

You seem to think the 'London lifestyle' is vapid and grotty, that it's about going to overpriced bars and wasting money. One of the reasons I love London is that I can meet people from all over the world so easily and do just about any hobby I want. Not so easy in a small town.