Buying a studio flat?

snowqueen555

Hi all,

Based on the general advice of this forum I recently did not buy the flat in the link below. 

https://forums.moneysavingexpert.com/discussion/6372746/have-i-overpaid-on-this-flat/p1

Since then I have been outbid on any other flat I've tried to buy, the sizes for my budget range from 35-45sqm and usually require a lot of redecorating, don't have parking, usually electric heating.

I have had an offer accept on a new build studio flat (37sqm) in the city centre, this also comes with secure underground parking/cycle storage, combi boiler, good epc. I'm just wondering if this is a wise decision. I am compromising on space, but know I could comfortably live here. The bedroom can fit a double bed and wardrobe, is sectioned off and the kitchen/living room is open plan. The bathroom is big and spacious (I wish they'd made the bathroom smaller and the "bedroom" bigger).

The mortgage (over 30 years) and bills would be £925 and take up 50% of my take home pay. I think I would live here for 5 years and see what happens after that.

GDB2222

£925 is a pretty specific figure. How protected is that against increases? For example, interest rate rises?

For new build properties there’s no track record for service charges. Are you sure that the figure you have been given is reasonably accurate?

SavingPennies_2

New build + studio sounds like something that might be hard to sell on in the future. Are you currently living in a studio and if not are you sure its something you could live with for the next 5 years? You mention you know you could comfortably live there. I lived in a studio where the bed and wardrobe was sectioned off sufficiently for it to feel like a separate room so if that's the sort of layout I guess it could be doable, but having visitors round or if you have a partner it could start to feel pretty small. 50% of take home for mortgage and bills sounds fine though.

Brie

So the only thing you would need from 50% of your take home is food??  That seems like a fair bit of wriggle room to me.  Lots of dosh to whack into a savings account just in case.  

I think the only drawback with a studio flat is if you do stinky cooking or are really messy.  I'm assuming you are single and while people manage in tiny spaces I think that a studio would keep your living arrangements as single - which might fit right in with your plans.  (I only mention this as a friend who has a similarly sized space was plagued by a BF who kept suggesting that he should move in - there was just enough space for her clothing and stuff so no where for anything of his, including his dog....)

user1977

Mortgage lenders aren't fond of studio flats (because of the restricted market for them, and then that becomes a chicken-and-egg thing), so even if you find a way of buying it I would be concerned about how easy it might be to get rid of it later.

snowqueen555

user1977 said:

Mortgage lenders aren't fond of studio flats (because of the restricted market for them, and then that becomes a chicken-and-egg thing), so even if you find a way of buying it I would be concerned about how easy it might be to get rid of it later.

Apparently it is a lot easier now. Some of the big banks are more accepting now, including Santander, Halifax, Natwest

SavingPennies_2 said:

New build + studio sounds like something that might be hard to sell on in the future. Are you currently living in a studio and if not are you sure its something you could live with for the next 5 years? You mention you know you could comfortably live there. I lived in a studio where the bed and wardrobe was sectioned off sufficiently for it to feel like a separate room so if that's the sort of layout I guess it could be doable, but having visitors round or if you have a partner it could start to feel pretty small. 50% of take home for mortgage and bills sounds fine though.

I've been living in house shares for 10 years, so this will be a big upgrade. Not ideal but most people do not get their ideal home first time around? The studio wil be okay for 1-2 guests, I'm not ever going to have more than that.

Might be harder to sell, but Bristol market has been mad for many years, the city centre location and parking space I hope will help it keep it's value.

GDB2222 said:

£925 is a pretty specific figure. How protected is that against increases? For example, interest rate rises?

For new build properties there’s no track record for service charges. Are you sure that the figure you have been given is reasonably accurate?

New leasehold so this is in the contract. I'm pretty good with budgeting, so I would have £900 left of which £400 will cover living expenses giving me £500+ left over each month.

Brie said:

So the only thing you would need from 50% of your take home is food??  That seems like a fair bit of wriggle room to me.  Lots of dosh to whack into a savings account just in case.  

I think the only drawback with a studio flat is if you do stinky cooking or are really messy.  I'm assuming you are single and while people manage in tiny spaces I think that a studio would keep your living arrangements as single - which might fit right in with your plans.  (I only mention this as a friend who has a similarly sized space was plagued by a BF who kept suggesting that he should move in - there was just enough space for her clothing and stuff so no where for anything of his, including his dog....)

Yeah I've factored that in. I basically live out of my bedroom anyway so used to all that. It will be a big upgrade and I don't have many things as well.

See above, thanks!

user1977

snowqueen555 said:

user1977 said:

Mortgage lenders aren't fond of studio flats (because of the restricted market for them, and then that becomes a chicken-and-egg thing), so even if you find a way of buying it I would be concerned about how easy it might be to get rid of it later.

Apparently it is a lot easier now. Some of the big banks are more accepting now, including Santander, Halifax, Natwest

But many aren't, and if things go pear-shaped, I would expect studios to be rejected by those lenders again.

And even if mortgageable, they're simply unpopular. FTBs these days are often not buying until their lifestyle needs something a bit bigger.

Sarah1Mitty2

snowqueen555 said:

Hi all,

Based on the general advice of this forum I recently did not buy the flat in the link below. 

https://forums.moneysavingexpert.com/discussion/6372746/have-i-overpaid-on-this-flat/p1

Since then I have been outbid on any other flat I've tried to buy, the sizes for my budget range from 35-45sqm and usually require a lot of redecorating, don't have parking, usually electric heating.

I have had an offer accept on a new build studio flat (37sqm) in the city centre, this also comes with secure underground parking/cycle storage, combi boiler, good epc. I'm just wondering if this is a wise decision. I am compromising on space, but know I could comfortably live here. The bedroom can fit a double bed and wardrobe, is sectioned off and the kitchen/living room is open plan. The bathroom is big and spacious (I wish they'd made the bathroom smaller and the "bedroom" bigger).

The mortgage (over 30 years) and bills would be £925 and take up 50% of my take home pay. I think I would live here for 5 years and see what happens after that.

Unlikely that you have been outbid in the last week or so? Things changed massively for lending in the last couple of weeks, the flat you want buy will almost certainly be cheaper in future, why not just wait? And your mortgage and bills over 30 years will be whatever inflation and interest rates say they are, not a fixed amount, so the less debt you start off with the better off you will be longer term.

snowqueen555

Sarah1Mitty2 said:

snowqueen555 said:

Hi all,

Based on the general advice of this forum I recently did not buy the flat in the link below. 

https://forums.moneysavingexpert.com/discussion/6372746/have-i-overpaid-on-this-flat/p1

Since then I have been outbid on any other flat I've tried to buy, the sizes for my budget range from 35-45sqm and usually require a lot of redecorating, don't have parking, usually electric heating.

I have had an offer accept on a new build studio flat (37sqm) in the city centre, this also comes with secure underground parking/cycle storage, combi boiler, good epc. I'm just wondering if this is a wise decision. I am compromising on space, but know I could comfortably live here. The bedroom can fit a double bed and wardrobe, is sectioned off and the kitchen/living room is open plan. The bathroom is big and spacious (I wish they'd made the bathroom smaller and the "bedroom" bigger).

The mortgage (over 30 years) and bills would be £925 and take up 50% of my take home pay. I think I would live here for 5 years and see what happens after that.

Unlikely that you have been outbid in the last week or so? Things changed massively for lending in the last couple of weeks, the flat you want buy will almost certainly be cheaper in future, why not just wait? And your mortgage and bills over 30 years will be whatever inflation and interest rates say they are, not a fixed amount, so the less debt you start off with the better off you will be longer term.

I've always put it off for a few years and I am always in a situation where thing are getting less affordable. There has to be a point where I just buy? I am not sure prices will go down too much, but rates will certainly go up.

[Deleted User]

Hi @snowqueen555,

I am in a similar position to you as a FTB entering the market at a difficult time, as well as having several near misses behind me. Yes, it's not a great time to buy, but when is it ever? The alternative is waiting it out and spending money on rent in the interim, and who knows when it will be the 'right' time? I imagine, especially as you have a house share, you are probably craving a space of your own.

I'm no expert on the market, but my observation from your comments is that you are keen on this place. The fact you will still be able to comfortably save money on top of mortgage, bills etc is a plus. I understand your doubt (it's natural, I've experienced the same since my offer was accepted last week) but I sense that overall, you already know the answer to your question! 

RAS

I've seen some pretty nasty corrections in the market over my lifetime. It always bounces back eventually.

What you need to be assessing is what buying offers you over renting? What's the monthly cost differential? How much does it cost you every time you have to move? Does renting limit your chance to engage in activities because you have to jettison stuff every year or two? 

On the other side, if you lost your job, do you have scope to pay the mortgage without benefits? Do you live somewhere where replacement work is easy to get? Or would the location hamper your future job search? And have you visited the studio at different time to assess issues like noise, particularly from properties above you?