Buying flat in london

kaymee

Hello, I’m a single 36 year old woman looking to buy my first flat in london. I’m quite clueless about properties and finding the search a bit overwhelming, so any tips would help!

I haven’t decided the area, but have considered Islington, Dalston, Nine Elms, Clerkenwell. I also chanced upon a property near hampstead Heath that I like, but want to get hang of that area / distance to work etc. I want to stay close to central london as that’s where work is (when I’m able to get back to working from office!), and most friends live around that area. It’ll be nice to have a flat that’s 5-10 mins walk from a tube station for easy transport. And although I have looked at a few types of properties, I get gravitated towards newer builds (not necessarily just released new builds). I have a budget of £800k and looking for 2 or 2.5 bedroom property.

Here are a few questions i have:

1. Would be great to get some views on the areas I’m looking at. I understand everything comes down to personal preference - but anything I should have in mind? From a financial perspective, is one area a better choice than other?

2. I have heard that banks don’t give out mortgages for properties where ground rent > 0.1% of the property price, and I need to be wary about some of the ground rent escalation clauses. Does anyone know what escalation clauses are ok and what’s not ok? Any views on service charges / anything to be wary of there?

3. does anyone have any advice on how much I should look? I have been using right move, but is it better to stick to one agent? Work with several? Any strategies for how househunt should be planned?

4. How should I research on the fair price of a property I like?


Any advice will be appreciated

K_S

@kaymee
2. Very generally speaking, doubling ground-rent clauses are fine as long as the doubling period is at least 20/25 years. With a budget of 800k, I doubt you'd come up against the >0.1% issue.

Tbh, with leases and mortgages there's only so much due-diligence you can do prior to putting in an offer. EAs/vendors will often not know about or withhold potential sticking points until it comes up during conveyancing.

If you're looking to buy in purpose built blocks, with respect to mortgages, the main issue that throws a spanner in the works is usually lack of an appropriate EWS1 rating. 

kaymee

Thanks @K_S!

propertyhunter

I would really try and get a freehold property if possible - but I know you want to be central and we all know what the prices are like. Do your due diligence with respect to fire safety issues during the conveyancing process. You must have seen it in the news this week. 

In terms of your search, I would say you need to go and build relationships with estate agents and see lots of properties. This means you can get a sense of what things are out there and what you like and don't like. Sometimes you can walk into a place and it just feels right. It's also good to build relationships with estate agents so that new instructions come to you first - the best properties are often sold off market (not on Rightmove/Zoopla, but from the agent sending you an email or calling you to let you know about a new instruction and book early bird viewings). You want to be on their preferred buyer list, which means showing you are serious by seeing properties with them and calling them regularly so they don't forget you but not to the extent that you annoy them. Sometimes they want to see an agreement in principle to know that the finances are in order. 

custardly

I'd try to avoid flats with that budget. You should be able to just about squeeze in to a terrace in nine elms with that budget.

Speaking from experience, a leasehold flat is an absolute nightmare!

propertyhunter

Also, I would read these articles re: Nine Elms. Not sure what to make of them, but I'd read them if I was considering the area. 

https://www.standard.co.uk/news/uk/nine-elms-square-development-battersea-power-station-sales-b965719.html

https://www.theguardian.com/artanddesign/2021/feb/02/penthouses-poor-doors-nine-elms-battersea-london-luxury-housing-development

kaymee

Thanks @propertyhunter, that’s useful advice on how to approach viewings / agents. 

propertyhunter said:

In terms of your search, I would say you need to go and build relationships with estate agents and see lots of properties. This means you can get a sense of what things are out there and what you like and don't like. Sometimes you can walk into a place and it just feels right. 

This is something I struggle with. Is it ok to tell the agent there’s nothing wrong with the flat, but I’m still in early stages of viewing and want to view more? Would it irk off the agent from showing me more properties?

propertyhunter said:

I would really try and get a freehold property if possible. 

I know freehold is always better over leasehold, but is there a real issue of owning a leasehold if the ground rent terms are reasonable? More than the budget, I think share of freehold will get me the kind of flats I don’t like.

Thanks for the links as well. Would you know if I can “accidentally” end up buying affordable housing? Interesting to see such a huge unsold inventory - hopefully can only mean a good thing in the short term for buyers, and something that’s not a long term problem. Could also mean the inventory is overpriced…

kaymee

custardly said:

I'd try to avoid flats with that budget. You should be able to just about squeeze in to a terrace in nine elms with that budget.

Speaking from experience, a leasehold flat is an absolute nightmare!

Would love to hear about your experience, and why a leasehold flat may be a nightmare…

Is leasehold vs freehold the only reason you recommend a terrace over a flat?

propertyhunter

Yes, it's fine to have no apparkaymee said:

This is something I struggle with. Is it ok to tell the agent there’s nothing wrong with the flat, but I’m still in early stages of viewing and want to view more? Would it irk off the agent from showing me more properties?

I know freehold is always better over leasehold, but is there a real issue of owning a leasehold if the ground rent terms are reasonable? More than the budget, I think share of freehold will get me the kind of flats I don’t like.

Thanks for the links as well. Would you know if I can “accidentally” end up buying affordable housing? Interesting to see such a huge unsold inventory - hopefully can only mean a good thing in the short term for buyers, and something that’s not a long term problem. Could also mean the inventory is overpriced…

On your first point, it's fine to say that the flat isn't for you, and for you to give no particular reason, but I would avoid saying you're in the early stages of a search because then it infers you want to see a few more without a chance of them securing a sale. Plus, you could love the second flat you see if you're that kind of person. For those flats where no obvious reason exists, you can just say you didn't get the feeling that this was the flat for you - but to be honest, giving them reasons where they exist is good because they will then know which flats suit you - which refines your search in future. 

There are lots of other considerations of leasehold vs freehold beyond ground rent. It's also about the rights the freeholder has over you in law. You need to search the forum and as well as Google the pros and cons of leasehold to get a sense of it. 

You can't accidentally buy affordable housing - there are strict qualification criteria. I don't think you will be eligible considering your budget. That brings me to the point that you have a decent budget for a house. London is so well connected you can afford to be a few more minutes out on the tube/train and have a decent dwelling that you will want to live in longer. 

Newnoel

Have you considered going sarf of the river? Plenty of good quality houses in your price range near Clapham Junction, which is only 10 minutes into central London:

Properties For Sale near Clapham Junction Station | Rightmove

GDB2222

These areas you mentioned are quite different. For example, Hampstead Heath is a wonderful area for walking, but you didn’t mention that as being important to you. So, you need to think about what is important for you, to help narrow down your choices.  Otherwise, it’s too confusing.