Buy a house, a flat or keep renting?

Nickfirsttimebuyer

I am thinking of buying a home at the moment (£115K depo & affordability for a mortgage up to £350K) however I am not sure what is better. A freehold house in zone 4-5-6 or a leasehold flat in zone 2-3? I prefer freeholds so I personally prefer a house to a flat however I do not want to commute more than an hour to my office which is in Liverpool Street! Additionally, I am not sure if this period is a good time to buy or keep saving & keep renting a place (rents are going up as well!). What do you think? 

WittyUserName

Nickfirsttimebuyer said:

I am thinking of buying a home at the moment (£115K depo & affordability for a mortgage up to £350K) however I am not sure what is better. A freehold house in zone 4-5-6 or a leasehold flat in zone 2-3? I prefer freeholds so I personally prefer a house to a flat however I do not want to commute more than an hour to my office which is in Liverpool Street! Additionally, I am not sure if this period is a good time to buy or keep saving & keep renting a place (rents are going up as well!). What do you think? 

As someone who owns both (a freehold house in zone 4 and a leasehold flat in zone 2) I’d say go for the house if you can afford it.

Anxiety about a massive repair bill or changes in legislation / regulation that would suddenly mean we’re caught up in the cladding / fire safety debacle (we aren’t currently) means we will be offloading the flat. 

I have a commute of a similar distance to yours and it’s 45mins door to door from zone 4 to zone 1. Edit to add: on the tube not driving

The commute from the zone 2 flat was brilliant - I walked to work a few times - but having a garden and no service charge or leasehold management company to deal with, makes the house worth it. 

In terms of buy versus rent, in your shoes I’d buy if the numbers line up, rather than try to time the market. Then at least your monthly payments are buying you some equity as well as a roof over your head, while with renting all you get is the roof, and nothing for the future. 

Views may vary. 

MultiFuelBurner

It's a simple choice and it's Buy Freehold every time if you can afford it and it works for your life and work.

RelievedSheff

Personally I would only ever consider the house as an option for buying.

RHemmings

My strategy at the moment is to buy a house to live in, and then not care less if the market does pirouettes and backflips afterwards - I'll have a place to live. 

The OP's situation is more complex, because: mortgage. When rates were low, a fix made sense as it insulated the buyer from changes in mortgage rates. But now interest rates are higher, and will they go down, stay the same, or go up further. Whatever you do, OP, please think through multiple future eventualities and have a plan for each. 

As for freehold versus leasehold, I agree with buying freehold if possible. While there are additional responsibilities with freehold, at least you have more ability to control the situation and not be exposed to risks beyond your control. To be balanced against other risks. 

steve866

The OP clearly understands the benefits of freehold already...

@OP you need to look at areas where you can afford a freehold house vs a flat and weigh up the pros and cons of both the commute and areas in general and decide which to compromise on.

For perspective, in the past I compromised with a freehold house further out of London (as opposed to a share of freehold apartment / conversion which was the alternative). 

It is hard to say whether I made the right choice, it paid of financially in the longer run but I did miss out on some social life not being in the area I really wanted.

Nickfirsttimebuyer

Thanks a lot for your answers. And I do agree with you! Buying a house makes just a lot more sense to me. I've been living in the last 10 years in East London (Stratford, Bromley by Bow, Docklands) so I'm not familiar with areas a bit further out. Ideally I'd like to buy a house in zone 4-5 where transportation cost won't be very high. Which areas do you recommend? I'm a 36 year old man who works in Banking (Liverpool Street/ Canary Wharf). I do enjoy living in a residential, quiet and safe area but at the same time I'd love to have shops/ pubs/ restaurants/gym/ a cinema close by. Any recommendations about areas would be greatly appreciated 👍🤠

lika_86

Nickfirsttimebuyer said:

Thanks a lot for your answers. And I do agree with you! Buying a house makes just a lot more sense to me. I've been living in the last 10 years in East London (Stratford, Bromley by Bow, Docklands) so I'm not familiar with areas a bit further out. Ideally I'd like to buy a house in zone 4-5 where transportation cost won't be very high. Which areas do you recommend? I'm a 36 year old man who works in Banking (Liverpool Street/ Canary Wharf). I do enjoy living in a residential, quiet and safe area but at the same time I'd love to have shops/ pubs/ restaurants/gym/ a cinema close by. Any recommendations about areas would be greatly appreciated 👍🤠

Do you really want to move much further out just to own a house? Why not look at a flat within a house conversion? That way you don't have the same issues with a block of flats but you might be able to remain closer to the centre.

Personally I think that moving out is all very well and good if you have to either for more space for a family or to be able to get on the property ladder at all, but if you don't have those things and particularly if you are saving and/or might be able to increase your earnings in the next few years then I'd be tempted to continue to rent for now or compromise on buying a freehold house.

Nickfirsttimebuyer

@WittyUserName @steve866 @lika_86 @RHemmings @steve866
I ended up buying a LOVELY 1 bed leasehold flat in April. The flat is in Highams Park, Zone 4 & 23 minutes by overground from Liverpool Street where I work. I am still going through the conveyancing sadly because the property management company, FirstPort, is delaying everything since they do not reply to solicitors inquiries (or when they do they do not give satisfactory answers). I read their reviews in Trustpilot & they are ALL horibble. I am very stressed & even considering pulling out because if FP create such issues now, I'm not sure what happens once I'll be in their leasehold. Let me know your thoughts.

RHemmings

Nickfirsttimebuyer said:

@WittyUserName @steve866 @lika_86 @RHemmings @steve866
I ended up buying a LOVELY 1 bed leasehold flat in April. The flat is in Highams Park, Zone 4 & 23 minutes by overground from Liverpool Street where I work. I am still going through the conveyancing sadly because the property management company, FirstPort, is delaying everything since they do not reply to solicitors inquiries (or when they do they do not give satisfactory answers). I read their reviews in Trustpilot & they are ALL horibble. I am very stressed & even considering pulling out because if FP create such issues now, I'm not sure what happens once I'll be in their leasehold. Let me know your thoughts.

My thoughts are: you're in the process now. It may drag out, but if you stick in there you may get the property. In the UK, even if your solicitor is good, until contracts are exchange nothing is guaranteed. 

Nickfirsttimebuyer

@RHemmings so basically you advise me to wait and see what happens. I'm just anxious I'll have to deal with issues with the management agency & when/if I sell I won't be able to because of these delays potential buyers will be pulling out