London FTB: one bed flat vs H2B two bed

loose_cannon_2021

Hi everyone,

First time posting on this forum, and first time attempting to buy a property! I am London-based and looking to buy with around a £30k deposit, ideally in East London areas such as Hackney, Tower Hamlets and Stratford. I'm also considering Woolwich due to the Crossrail station, should be operational starting in 2022. My main criteria is that the property should be reasonably walkable to an underground or overground station, and not ex-council nor on top of commercial premises.

My dilemma is that, with these constraints, I believe my options are either buying a one-bed flat or going for a two-bed but with the H2B scheme. From following the forum and speaking to others, the main con of getting a one bed seems to be the limited buying and rental markets, the price volatility, especially in a downturn, and the fact that I will eventually need to move when I start a family. The cons of the H2B scheme are well known, however I'm now leaning towards this in order to get that extra bedroom and avoid the issues with one-beds. Any thoughts/advice would be greatly appreciated!

ShinyYellowBoots

I ended up buying a two bed converted flat, but when I was searching I also considered one beds with a more flexible layout, e.g.  separate living room and a kitchen with enough room for a dining table. My thinking was that if I ever found myself needing a second bedroom then I'd have the living room available at least as a short term option. Good luck! 

london21

The benefit of a 2 bedroom is you can get a lodger if needed, in the future if your family grows, more space.

 “Hackney, Tower Hamlets and Stratford” The area you are interested in are expensive, might need to consider other up and coming areas.

Woolwich is zone 4 but has gone up due to crossrail. Have you considered  Belvedere which is not far to Abbey wood which is also a crossrail station. In belvedere should be able to get a 2 bedroom flat with your budget.

Read the requirements for H2B there are pros and cons.

hazyjo

I'd rather a 1 bed than a 2 through a scheme.

What's your max budget?

loose_cannon_2021

ShinyYellowBoots said:

I ended up buying a two bed converted flat, but when I was searching I also considered one beds with a more flexible layout, e.g.  separate living room and a kitchen with enough room for a dining table. My thinking was that if I ever found myself needing a second bedroom then I'd have the living room available at least as a short term option. Good luck! 

Most one bed flats I've seen are open planned, but it's worth keeping an eye out for, thanks for the tip

london21 said:

The benefit of a 2 bedroom is you can get a lodger if needed, in the future if your family grows, more space.

 “Hackney, Tower Hamlets and Stratford” The area you are interested in are expensive, might need to consider other up and coming areas.

Woolwich is zone 4 but has gone up due to crossrail. Have you considered  Belvedere which is not far to Abbey wood which is also a crossrail station. In belvedere should be able to get a 2 bedroom flat with your budget.

Read the requirements for H2B there are pros and cons.

Not heard of Belvedere before, will check it out. I was focused on East London because it's near work, easy to get to my parent's house from there and I'm familiar with the area. But I'm also open to other up and coming areas like Tottenham.

hazyjo said:

I'd rather a 1 bed than a 2 through a scheme.

What's your max budget?

With a 90% LTV, I could afford £350k. Though at that amount, I wouldn't have much money left for renovations so the flat would need to be in good shape. Have a girlfriend that may move in as well, so any flat would need to be decently sized as well.

hazyjo

My nephew is buying in Wanstead. It's where I'd be buying in his shoes too.

You can just get a 2 bed for that sort of price. Stay near Wanstead or Snaresbrook Stations (or somewhere in-between).

Tottenham and Tower Hamlets definitely wouldn't be on my list. Nor would Hackney with that budget tbh. It'll prob be in the dodgy bits.

katkatmachine

In our case, we got a two bed house through HTB. It was the best decision since we converted the 2nd room to an office, really happy since im wfh. 

HTB is a big help but my advice is you have to have an exit plan before taking it. Sit down first and write the numbers how you will pay it back, either by cash or by remortgaging. Would you be able to save and pay it back by cash or if you add it in the mortgage would you still be able to afford the monthly payments? The loan is tied to the value of the property so you have to take note of that as well. Good luck. 

ShinyYellowBoots

With a 90% LTV, I could afford £350k. Though at that amount, I wouldn't have much money left for renovations so the flat would need to be in good shape. Have a girlfriend that may move in as well, so any flat would need to be decently sized as well.

If you're flexible on location, check out Norwood Junction. A good sized two bed would easily be in budget and you'll have good transport (fast 12 minute train to London Bridge and the ginger line for east London). The high street is a bit rough and tumble in places, but we've got all of the hipster doofus staples: sourdough pizza, vegan joints, craft beer (and an artisan cheese shop any day now!). 

london21

loose_cannon_2021 said:

ShinyYellowBoots said:

I ended up buying a two bed converted flat, but when I was searching I also considered one beds with a more flexible layout, e.g.  separate living room and a kitchen with enough room for a dining table. My thinking was that if I ever found myself needing a second bedroom then I'd have the living room available at least as a short term option. Good luck! 

Most one bed flats I've seen are open planned, but it's worth keeping an eye out for, thanks for the tip

london21 said:

The benefit of a 2 bedroom is you can get a lodger if needed, in the future if your family grows, more space.

 “Hackney, Tower Hamlets and Stratford” The area you are interested in are expensive, might need to consider other up and coming areas.

Woolwich is zone 4 but has gone up due to crossrail. Have you considered  Belvedere which is not far to Abbey wood which is also a crossrail station. In belvedere should be able to get a 2 bedroom flat with your budget.

Read the requirements for H2B there are pros and cons.

Not heard of Belvedere before, will check it out. I was focused on East London because it's near work, easy to get to my parent's house from there and I'm familiar with the area. But I'm also open to other up and coming areas like Tottenham.

hazyjo said:

I'd rather a 1 bed than a 2 through a scheme.

What's your max budget?

With a 90% LTV, I could afford £350k. Though at that amount, I wouldn't have much money left for renovations so the flat would need to be in good shape. Have a girlfriend that may move in as well, so any flat would need to be decently sized as well.

With £350k budget might be able to get a house because leasehold properties can be a pain with service charge etc. 

redefinr

Have you tried to peek into SE London? It's way cheaper than Hackney, Tower H or Stratford and you can get a much better value (in my opinion). I bought a 1 bed in Deptford Bridge (in front of the DLR, literally) whilst the area it's still a bit gritty (not any different than the area you mentioned, tbh) there is a huge amount of new builds popping up.
I think you can get 2 bed around here in a relatively-new build (10 years old?). 

I totally understanding the feeling of choosing the area where to live but unfortunately the prices in London are still quite high so be prepare to have a bit of flexibility.

hazyjo

redefinr said:

Have you tried to peek into SE London? It's way cheaper than Hackney, Tower H or Stratford and you can get a much better value (in my opinion). I bought a 1 bed in Deptford Bridge (in front of the DLR, literally) whilst the area it's still a bit gritty (not any different than the area you mentioned, tbh) there is a huge amount of new builds popping up.
I think you can get 2 bed around here in a relatively-new build (10 years old?). 

I totally understanding the feeling of choosing the area where to live but unfortunately the prices in London are still quite high so be prepare to have a bit of flexibility.

Was remembering your story the other day and wondering how you're getting on. Hope it's all working out okay over there in Deptford!