First time buyer in London and feeling a bit overwhelmed. Very grateful for any advice please.

WagathaChristie

First time buyer in London and feeling a bit overwhelmed. Very grateful for any advice and help please. 

Would be very grateful for some advice please! I am hoping to buy a house in London this year, and think it is doable. 

I’m aware though that buying property in London is very expensive and that it’s going to be the biggest investment of my life, and I’m getting nervous about that and also feeling pretty stuck on what to prioritise and what to compromise on. 

Some info about me:

- 33F

- Work in Westminster, in the Civil Service, with £2.3k monthly take home pay (£39.2k annual pre-tax salary). Am aiming to get a better paid job at the next grade up - still in the Civil Service - this year, but if this happens, my pay will realistically only go up by around £100-£200 per month, which is good, but it won’t be a massive increase. 

- Currently a lodger in zone 3, paying £900pm with all bills included 

- Single and no kids; would like to have a family eventually

Budget: 

- £570,000 deposit from family: this will need to cover stamp duty costs, moving-in costs (mortgage set-up costs, conveyancing costs) and furnishing costs, as well as covering the price of the property 

- If I allocate £15k of the £570k to moving-in and furnishing costs, and up to £22,500 for stamp duty costs (as the stamp duty for a £650,000 property bought after stamp duty goes up this April), this is £37.5k; it would give me a deposit of £530k 

- Bearing in mind mortgage interest rates and bill costs, I think a £168k mortgage paid over 25 years, with overpayment options, is the best current option, to avoid taking too much risk 

- With the £570k deposit and £168k mortgage, this means I could technically afford a property of up to £700k, but I’d prefer to go for a property up to £650k, as stamp duty would be even more expensive in the £650-700k price range, and to invest the £50k difference to go either towards house improvements and/or to help towards getting somewhere better in the future. I know making any home improvements - especially in London - is very, very expensive though! And it might be tricky to live in the house whilst the improvements are being done. 

Other things to consider: 

- Can’t drive due to eyesight issue (can’t read car number plate from required 25 metre distance), so would like to live somewhere with good transport links 

- Would like a house (2-3bed) rather than a flat, due to concern over leasehold/ground rent/service charge costs and wanting more space that I can put my own stamp on and somewhere that will appreciate and go up in future, hopefully allowing me to take the next step up the property ladder when the time comes, rather than struggling to sell what I end up buying or buying somewhere too small that I’ll quickly outgrow and potentially lose money on when selling, as moving is expensive 

- In terms of areas I’ve looked at in London, I’ve focused on south London, as this would be a relatively easy commute into work (train into Victoria). 

- I’d really like to live in an area that is a balance of good transport options, still feels like London and isn’t very far out - if possible, I’d love to stay in zone 3. I’m not sure if that’s possible though. I’ve focused on Streatham, as it has lots of properties in my budget, but often they seem like quite poor value 

I’d be really grateful for any advice please on what I could compromise on. Thanks so much. 

kinger101

The compromise part is really a matter of personal choice.  Are you prepared to be a 15 min walk from the tube for a larger house etc.

I'd go for the 3 bed over 2 if the money stretches.  It will likely be longer then before you outgrow the property.  

If you're willing to look outside London, Victoria  makes large parts of the SE an option.

Newbie_John

It really reminds me of our journey, we didn't want to live outside of zone 3 but ended up in zone 6. 
Prices go down, size goes up, quality goes up..
Have a look at all the fast trains as the commute from some places in zone 6 can be faster than zone 3 on tube. 
Really hard to advise as each has different likes, but visit a few properties in zones 3,4,5,6 and decide then what's best for you.

Our town is a bit boring, when we were bit younger we only cared that we can be in 25 mins at London Bridge and seeing friends there, now few years later we enjoy the green parks and open space around - especially when kids came.

Also, people know London from tube map but there is large part of south east London covered only by trains that has some decent places! 

Good luck!

WagathaChristie

Thanks kinger and Newbie. 

I feel a little stuck, as I’m not sure I can afford the monthly travel costs that come with moving further out e.g. moving past, say, zone 4. I definitely couldn’t afford to commute by train from the SE into London. 

Also, I’m single, and being completely honest, I think I would feel quite isolated on my own in one of the most outerly zones of London or in a SE town. 

Do you have any suggestions for any places up to zone 4 in London that I could look into please? 

It could be that I’m being very unrealistic, but I think in my position I want to prioritise location over size, and houses over flats, so to get the biggest freehold house I can afford up to and including zone 4. 

Thanks so much. 

[Deleted User]

In your position I think I would feel motivated to  set my budget to in fact be unencumbered by a mortgage. Having no mortgage or rent to pay would enable you to save a meaningful portion of your salary and or invest. The interest on that mortgage would be a bit more than I would want to be paying.

Newbie_John

It's numbers game, if your commute is £1500 more expensive a year that's £30k over twenty years but the house can be £100k cheaper.

If you buy more beds place, you can also get a lodger. 

Regarding location - Google maps 😅

SarahB16

I would try to go for a three bed house. 

I presume due to your job you can work from home some days in the week so one of the bedrooms could be your office and if I were you I would seriously consider taking in a female lodger. With rent a room relief up to £7,500 of the rent is tax free if you provide a furnished room and this will of course increase your monthly income. 

There is enormous demand for private rented accommodation in London so I don't anticipate you will have any problems whatsoever renting a bedroom.  You will probably only have one bathroom but I don't think this would deter a relatively young female from sharing with you.    

WagathaChristie

Thanks @SarahB16 - do you have any suggestions on areas I could look at please? I don’t think it’s the right step for me to take in a lodger, necessarily. I’m more wondering about which areas I can focus my search on. 

SarahB16

WagathaChristie said:

Thanks @SarahB16 - do you have any suggestions on areas I could look at please? I don’t think it’s the right step for me to take in a lodger, necessarily. I’m more wondering about which areas I can focus my search on. 

I'm sorry, no, I can't help you regarding which areas to look at.  I just wanted to suggest the possibility of you taking in a lodger as that would increase your monthly income and therefore also expand the locations that you could consider.

I understand if you don't wish to take in a lodger but thought I'd mention it in case it hadn't crossed your mind.  

london21

I also do not drive due to my sight. For me, somewhere near a station was very important—0.5 miles or less to a station.

Areas like Charlton, Blackheath, North Greenwich, Leyton, and Woolwich Dockyard etc. Streatham seems to be higher priced.

Have factors that are important to you for example near a station, garden etc have your nice to have and must haves and go and view some properties. Your deposit has you in a good position. 

gwynlas

You have time on your side so you can do on line searches of all areas within zones 3 & 4 rather than getting caught up in concentrating on one location.
Talk to colleagues who might offer insightful recommendations
As a lone female be aware of well lit routes to transprt hubs that offer multiple choices if lines closed