London first time buyer - which areas to look at and house v flat?

WagathaChristie

Hi all, I hope you’re well. 

I’m a first time buyer looking to buy in London and I’d appreciate your advice please. 

I earn £40k in a stable job in London (public sector), so would be eligible for a £180k mortgage (going by being offered a mortgage 4.5 times my salary). I’m very fortunate to have a £520k deposit, due to an inheritance. My budget altogether is £700k. 

I’m unsure whether to buy a house or flat, and which area of London to buy in, and would appreciate your thoughts please. 

Re buying a house v flat, my head is telling me to buy a house, for reasons of future-proofing (although currently single with no kids) and as houses are generally better investments and you can do work on them. Re buying a flat, I’m tempted to buy one because it would better suit my current needs and lifestyle (don’t need somewhere big). However, I’d prefer a freehold flat for flexibility and cost reasons, and these aren’t very common, and would also like a garden, so my instinct is saying to buy a small-ish house that I can extend upwards/outwards, with a garden. 

Re which area of London to buy in, many areas are of course completely out of my budget. I’d like to live somewhere with good access to transport (within 10 mins walk of a tube or train), zone 3 (ie not too far from central London) and that’s pleasant to live in. I rent in Acton (west London), but can’t afford to buy there. I’ve mainly been looking at Streatham, as it’s within my budget, and it’s a nice area, but I’d be very grateful for any other suggestions anyone might have re areas to look at. Thanks! 

Albermarle

Is £700K, still leaving you with a reasonable amount of savings?

With a salary of £40K and a mortgage and a property to run, there will not be much spare cash to enjoy whilst you are still single.
Plus you mention extending a property. Are you aware how much this costs nowadays, especially in London. A pretty standard extension will not give you much change out of a £100K , if any. 
Apart from that, there is the cost of buying and most houses need some spending on them when you move in, to a greater or lesser extent.

WagathaChristie

Hi Albermarle, thanks very much for your reply. 

I’m lucky to have separate savings (an emergency fund and another savings account) aside from the savings I plan to use to buy the house. 

I agree with your point about my costs likely going up as a homeowner, in comparison to my current situation as a tenant, due to mortgage and house maintenance costs. I have factored this in and can afford this at the moment, providing interest rates do not rise over the next few months. 

Re extending a property, I realise this costs a lot of money. I was assuming a similar cost to what you mention here, but aware costs could even increase beyond that. If I bought a property that could be extended, I don’t plan to extend it straightaway but to just have the option to do so. 

N3chifor

£700k in London?  You're in a great position!  Forget Streatham, for that budget, you can do way better.  Look at areas slightly further out on the tube lines,  you'll get more house for your money.  Think about places like  Southfields or Wimbledon (though they're creeping up), or even parts of Tooting.  Freehold houses with gardens in Zone 3 are rare at that price, but you'll have more luck than in Acton.

Albermarle

Re extending a property, I realise this costs a lot of money. I was assuming a similar cost to what you mention here, but aware costs could even increase beyond that. If I bought a property that could be extended, I don’t plan to extend it straightaway but to just have the option to do so. 

Due to the extraordinary rise in building costs since Covid, it probably makes sense to buy somewhere that has already been extended ( when costs were a lot lower) as long as it has been done properly. All other things being equal.

 Think about places like  Southfields or Wimbledon (though they're creeping up), or even parts of Tooting. 

I lived in that part of the world many years ago. I would say that once you get south of Tooting, it does not really feel so much like London anymore. Even to the point I would recommend looking more around Tooting Bec Tube station rather than Tooting Broadway.

gwynlas

Looking on line there are over 1800 houses available for between £550-£700K in London postcodes.

Dependent on where you eed to commute to for work or your social life this gives you a lot of options,

Think of the overground network as well as the tube obviously you get more house for your money in less desirable postcodes

AlexMac

look at SE7, SE8, SE13, and SE18…

close to the very upmarket bits of SE3 and SE10,  but sharing their same easy access to lovely parks and open spaces, good Zone 3 (and some Zone4), and good public transport!

I love it here

bouicca21

Think more about the type of area -  Green space? Shops? Coffee shops? Restaurants?  What rail/tube line?  City vibe or not?  All these things matter because OP will not be at work 24/7 and may change jobs and need a different commuting route.  Personally I can’t stand the idea of living in a bland commuter area with nothing but acres and acres of housing, but for some people that’s the dream.  

Albermarle

bouicca21 said:

Think more about the type of area -  Green space? Shops? Coffee shops? Restaurants?  What rail/tube line?  City vibe or not?  All these things matter because OP will not be at work 24/7 and may change jobs and need a different commuting route.  Personally I can’t stand the idea of living in a bland commuter area with nothing but acres and acres of housing, but for some people that’s the dream.  

Not all commuter areas are like that.
Also if you venture a bit farther out towards the M25 ( outside and inside)  there are small towns/large villages, with direct trains to London. Journey time 30 to 60 minutes. ( then a bit extra depending on your exact work location)
No city vibe, but no shortage of green space/coffee shops/restaurants/pubs etc. and cheaper of course.

EssexHebridean

Have a think about locations on the Elizabeth line, especially on the eastern side. If you are particularly keen on south of the river then the Liz Line has been a gamechanger for Woolwich and areas like that. You could get a 2 or 3 bed Victorian property with a garden and have a lot of change left from that budget. 

Oh yes - and buy a house. Your level of budget  means you're not in a position to need the inconvenience of owning leasehold, and as you say, future proofing. Having owned a leasehold property for a long while and now being in a freehold house, I can honestly say that there is probably no better feeling than knowing that you, and you alone, have the say on when you have to spend money on your home! 

i_like_cats

That’s a decent budget for a 2-bed flat in many desirable parts of inner London.

But it’s not a budget for a house, unless you’re prepared to live somewhere ropey or very distant.

How about this in Crouch End?:

https://www.rightmove.co.uk/properties/155543504#/?channel=RES_BUY

Palmers Green and Alexandra Palace also have some amazing conversion flats.   Over to the NW there’s Queens Park and perhaps Gospel Oak.

Leytonstone to the East is very popular these days, especially Warner houses split into flats.

Or you might find SE London suits you, as you say you’re public sector.  So you could also look around East Dulwich, Telegraph Hill, Brockley, and Nunhead.