House buying dilemma - criticize my thinking please.

Sistergold

There are a few places you should be able to afford within the M25 if you look hard enough? You can get a house with a garden, it should be reasonably quiet but not as green, just a tree here and there but there should be a park as is usual in London not too far from the house. Having said that you are right there will still be an element of more expenses as you will need to move out of zone/place you are now. You mentioned east London, what are your reasons for avoiding east London? 

There is really nothing wrong with staying where you are for another 1-2years, save more aggressively etc then buy. 

In all this after buying you can have a lodger! I know it’s not ideal Privacy and all but if money is really a big consideration then you can rent out one bedroom. 

strawb_shortcake

In all your figures have you accounted for the costs as and when a baby arrives? Reduction in salary, maternity pay, nursery fees or reduced hours at work? Plus other baby/child related expenses? 

Rosa_Damascena

hazyjo said:

Blimey. Tbh I think you're overthinking it. Plus you seem to be comparing a 1 bed flat with a 3 bed house in a lot of that.

Where in the City do you need to get to? It's small, so maybe look at what goes into Liverpool Street, Fenchurch Street, Bank, Moorgate, Cannon Street, etc.

I'd add Hertford, Ware, and Bishops Stortford to the list (if that budget stretches, not looked there for ages) and delete the ones south of the river unless they go to Cannon Street. You might as well avoid tubes, plus that'll add loads of time - and stress - to your journey!

Loving Leigh-on-Sea, Essex. Fantastic town. Very reliable C2C line. 43-50 mins to Fen St. Budget may be a little tight, but doable.

Benfleet is more affordable and is that bit closer.

ACCA

FTB_Dan said:

I know you said not to look at the figures in too much details (and without knowing your finances) but you should typically be able to get 4-4.5X your salary for a mortgage. 

Thanks and agree with you on the 'typical' range, but my partner has got some weak points on her credit score which we are actively working on but still takes time. Hopefully in a year these will be addressed. The problem is that getting extra leverage would mean the numbers (rent vs train+interest) get even wider apart, ie no benefit.

ACCA

MovingSiren said:

I don't see St Neots on your list. We lived there and the husbot commuted into London for 18 months. It has most amenities and is a very walkable town. Also within driving distance of Cambridge, Peterborough and Bedford (which are also on the train lines into London)

Thank you, I will keep that place in mind.

The issue is the train price, which is equivalent to Milton Keynes pricing, that's £5,800 per annum or £485 per month, that's even greater than I've included in my computations above.
Say: £485 train, tube in London is another £126, plus bus to train station in St Neots say ~£70, that's £681 per month. This cost alone is exceeding our current monthly rent (£600), and I haven't added the lost money on bank interest. Of course, that's not a fair comparison given we rent a 1-bed flat and are considering a 3-bed house, but the logic still remains: if there is no rush, we shall not be taking this step.  

ACCA

mayling03 said:

You've done a lot of extensive research so well done, I do not live in that part of England so can't comment on location.

In terms of the interest element paid to the bank, forget about this. As renting is dead money anyway. The bank is lending you a big chunk of money so you can 100% own an asset in advance of you saving for it to buy outright. I rem looking at this when i was a FTB, it's a healthy debt and should be seen as that.

In terms of both your jobs, what about moving jobs or will you both definitely keep with same company? 

Thank you for reading and sharing your view.

Re interest: this is in my view dead money as well. I mean, it is definitely worth it when you really need it, eg kids, family, other reasons. From economic point of view, comparing my current circumstances, I can't articulate the 'buy' option.

Re jobs: for the time being, I think the jobs will be in the City unfortunately, there are some specifics.

ACCA

Rambosmum said:

Are you planning kids? My advice will vary massively depending on the answer! 

What's £1450 as a % of your combined take home pay?

Planning, yes, that's what's triggered the question in the first place. Timeline wise - perhaps in 2 year's time.

The £1,450 is around one third of our combined net income.

ACCA

Sistergold said:

There are a few places you should be able to afford within the M25 if you look hard enough? You can get a house with a garden, it should be reasonably quiet but not as green, just a tree here and there but there should be a park as is usual in London not too far from the house. Having said that you are right there will still be an element of more expenses as you will need to move out of zone/place you are now. You mentioned east London, what are your reasons for avoiding east London? 

There is really nothing wrong with staying where you are for another 1-2years, save more aggressively etc then buy. 

In all this after buying you can have a lodger! I know it’s not ideal Privacy and all but if money is really a big consideration then you can rent out one bedroom. 

Thanks for your time.

Re avoiding East London - difficult to say, just never heard anyone speaking anything good about that part. Most of my colleagues are based either in Surrey or Kent, and they are loving it. But of course - I will need to look into East given there are no options.

Schwarzwald

ACCA said:

Sistergold said:

There are a few places you should be able to afford within the M25 if you look hard enough? You can get a house with a garden, it should be reasonably quiet but not as green, just a tree here and there but there should be a park as is usual in London not too far from the house. Having said that you are right there will still be an element of more expenses as you will need to move out of zone/place you are now. You mentioned east London, what are your reasons for avoiding east London? 

There is really nothing wrong with staying where you are for another 1-2years, save more aggressively etc then buy. 

In all this after buying you can have a lodger! I know it’s not ideal Privacy and all but if money is really a big consideration then you can rent out one bedroom. 

Thanks for your time.

Re avoiding East London - difficult to say, just never heard anyone speaking anything good about that part. Most of my colleagues are based either in Surrey or Kent, and they are loving it. But of course - I will need to look into East given there are no options.

Subject to how you define East London, but I have been living in East for 7 years and recently bought here, zone 2, and overall v happy. But admitting I cant really imagine living outside London (I am not from the UK).

Overall, well done research, but also highly rational i find. If you not planning to have a child in the v short term, and assuming you still enjoy london life, i would rather opt for a 2/3 bedroom flat for the interim until your family has actually expanded.
that’s personal, but commuting such long distances is inherently less reliable than living closer to work, and I would go nuts after a few times of train cancellations, interruptions, delays on my way to work …. unless I really needed to, eg due to actually having a kid and wanting live outside London.

hazyjo

That £30k salary is very low for London. Is that full-time? Can that be increased? Should easily be able to earn more than that in town.