Help with deciding on property based on finances

Schwarzwald

F37A said:

Emily_Joy said:

Sort out the job first. Make sure it is relarively secure/get an insurance. Then look for accommodation. 

But i'm so desperate to buy as this is a good year to buy with prices falling

Desperation never makes a good base to make any decision!

theoretica

Seems like it is a balance between the security you want of being comfortably under budget, or the enjoyment of living in a larger property.  Even with the larger flat you have some fallback - enough to give you time to work out a plan. Some people go 100% into a property with no leeway at all and I think you are wise not to do that and good that you don't need to.

I think you need to just try to work out for yourself how financially stressful you would find the larger place, and how much more you would like living there.  Or look for a completely different property somewhere between the two!

F37A

Schwarzwald said:

F37A said:

Emily_Joy said:

Sort out the job first. Make sure it is relarively secure/get an insurance. Then look for accommodation. 

But i'm so desperate to buy as this is a good year to buy with prices falling

Desperation never makes a good base to make any decision!

Thanks my brother said this as well haha. At some point you have to take what you can because nobody has time to spend forever searching for property.

F37A

theoretica said:

Seems like it is a balance between the security you want of being comfortably under budget, or the enjoyment of living in a larger property.  Even with the larger flat you have some fallback - enough to give you time to work out a plan. Some people go 100% into a property with no leeway at all and I think you are wise not to do that and good that you don't need to.

I think you need to just try to work out for yourself how financially stressful you would find the larger place, and how much more you would like living there.  Or look for a completely different property somewhere between the two!

Yeah I mean the current backdrop of stress in economy and cost of living means one should be more cautious generally and so more cash is king. Of course if this was pre covid my view would be different.

Thanks it is good to get another perspective. Just don't want to end up like the couple the agent was talking about who bought a flat for 300k then repossessed.

Yeah financial stress is important. No matter how lovely a property is it is not worth it if you'll be under debt distress. 

ArbitraryRandom

F37A said:

 i go for this studio in london in a residential area a bit further from amenities but very affordable and i'd have no worries even if a new job doesn't work out and I have to leave - in this case I would comfortably have enough cash to cover the costs. Service charge very small.

'Stress free' is a big plus. How often do you actually use the 'amenities' (are you out and about often or more likely to spend the evenings at home with a book/hobby) and what's the public transport situation? Can you nip to the shops/out for an evening on the spur of the moment? Does the studio 'feel' like a space you can be happy in, or will it feel claustrophobic? Lower outgoings mean more opportunities to save (either for a larger flat or holidays or early retirement) so could be seen as a stepping stone or enabler for other parts of your life.  

I go for 1 bed flat more spacious, good amenties, better if I want to have kids, but my monthly costs all include are 83% of my monthly salary albeit i'd have 15k-18k sitting in a bank for situation where i lose my job or have reduced pay. Service charge is 2.1k which annoys me as that will always rise.

One bed flat for kid(s)? Maybe when they're young but I wouldn't say it's a good long term idea if there's another option. Are kids on the horizon at the moment? You haven't mentioned a partner (not that one is required nowadays), but partner plus kids changes the financial situation re affordability (increased outgoings but also potentially double income and less risk of you both being unemployed at the same time). If you like the flat because you like it and can see yourself living there happily then that's a good reason to go for it, but not if the anxiety about money will taint that happiness, which is only something you can know about yourself. 

I am apprehensive about having little headroom against monthly take home pay for the flat. If rates rise any more could be very painful. I am in a position to get a decent pay rise should i change jobs but that has its risks. Thoughts welcome? am i being too risk averse. I want the flat but a little scared of cost of living situation. 

There's no such thing as being too risk averse. We all have an individual risk appetite and only you can decide if this is a decision you can feel comfortable with or that will live in your head over the next few months/years. You have a healthy emergency fund, but is it enough for you to feel comfortable? What are your long term goals and can you meet them sooner by having the smaller flat (do you want to meet them sooner by having the smaller flat or are you happy with the progress of your 1/5/10/20 year plans?) 

My initial thoughts on reading the OP. 

RedFraggle

Is the new job with your existing company? If it isn't you're unlikely to get redundancy should that happen. Statutory redundancy rights are after 2 years employment. 

F37A

ArbitraryRandom said:

F37A said:

 i go for this studio in london in a residential area a bit further from amenities but very affordable and i'd have no worries even if a new job doesn't work out and I have to leave - in this case I would comfortably have enough cash to cover the costs. Service charge very small.

'Stress free' is a big plus. How often do you actually use the 'amenities' (are you out and about often or more likely to spend the evenings at home with a book/hobby) and what's the public transport situation? Can you nip to the shops/out for an evening on the spur of the moment? Does the studio 'feel' like a space you can be happy in, or will it feel claustrophobic? Lower outgoings mean more opportunities to save (either for a larger flat or holidays or early retirement) so could be seen as a stepping stone or enabler for other parts of your life.  

On the one bed flat there's a good gym with swimming pool, and spa 15 min walk away. A spiritual centre again not far away, a big supermarket not far away. I do have to take a bus to get to the train station but its only 7-8m journey and bus top is right outside. There are green spaces nearby as well and short journey to all shops you want or restaurant. The studio looks like nice but if I was to have a kid there at least in the short term it would be cramped. I can be happy there but then if I have a kid then won't be as happy or my partner. But the stress free element has big importance if I change jobs externally which I want to do. Yeah the studio offers opportunity to save but I feel it may be harder to sell and selling and buying is costly anyway.

I go for 1 bed flat more spacious, good amenties, better if I want to have kids, but my monthly costs all include are 83% of my monthly salary albeit i'd have 15k-18k sitting in a bank for situation where i lose my job or have reduced pay. Service charge is 2.1k which annoys me as that will always rise.

One bed flat for kid(s)? Maybe when they're young but I wouldn't say it's a good long term idea if there's another option. Are kids on the horizon at the moment? You haven't mentioned a partner (not that one is required nowadays), but partner plus kids changes the financial situation re affordability (increased outgoings but also potentially double income and less risk of you both being unemployed at the same time). If you like the flat because you like it and can see yourself living there happily then that's a good reason to go for it, but not if the anxiety about money will taint that happiness, which is only something you can know about yourself. 

Yeah at least in the short term. If I can't sell then i can easily have a kid stay there till they age 5 as its spacious. No kids at the moment but future proofing. Yes my plan is to get a partner pronto after purchase. Yeah the 1 bed flat I like because i think i'll be happy there. Easier to meet a partner as easy to travel to various parts of london with this flat. 

I am apprehensive about having little headroom against monthly take home pay for the flat. If rates rise any more could be very painful. I am in a position to get a decent pay rise should i change jobs but that has its risks. Thoughts welcome? am i being too risk averse. I want the flat but a little scared of cost of living situation. 

There's no such thing as being too risk averse. We all have an individual risk appetite and only you can decide if this is a decision you can feel comfortable with or that will live in your head over the next few months/years. You have a healthy emergency fund, but is it enough for you to feel comfortable? What are your long term goals and can you meet them sooner by having the smaller flat (do you want to meet them sooner by having the smaller flat or are you happy with the progress of your 1/5/10/20 year plans?) 

Thanks good to know it is a healthy emergency fund in another persons eyes. As long as i can secure a cheaper price and i get a small inflation adjusted pay rise in current job then the flat i will be more comfortable. The longer terms goals are to a.) have own place b.) change jobs c.) find a partner. But have been stuck on a.) for so long that has made me a prisoner in my job and c.) impossible.

My initial thoughts on reading the OP. 

Thanks so much really appreciate your help. Replies above. Just discussing is helping loads

F37A

RedFraggle said:

Is the new job with your existing company? If it isn't you're unlikely to get redundancy should that happen. Statutory redundancy rights are after 2 years employment. 

New job is external most likely. Looks like i'd have to stay put in current job for 6m if i bought the 1 bed flat.