What should I buy?

Uriziel

ReadySteadyPop said:

TroubledTarts said:

Uriziel said:

Tabieth said:

My advice is definitely not a studio. Harder to sell and less comfortable to live in. Personally I’d rather get something that’s big enough for me to expand into, that I can afford without a lodger, but isn’t too big. For example, I live alone and I’ve just bought a 2-bed terrace house. Originally I was open to flats or houses but houses are the better option. Having been burned in the past, I’d avoid leasehold at all costs. I could have afforded 3-beds in a less desirable area but 1) I don’t need 3 bedrooms and 2) location is key. 

I noticed that I can afford 3 bedroom houses. The thing is that I would not want to stay there permanently and plan on buying something bigger in a few years. If I buy a 3 bedroom house in London is it likely to sell for a profit? The plan is to continue saving money and get a couple of payrises so that I can buy a larger house later down the line.
If I want to sell it on a profit I would have to make enough money to pay off the mortgage with the interest rate. Are house prices going up faster than the interest rates? I'm not sure if this would work or not.
People seem to be very unhappy with leaseholds and are saying that houses go up in price more than flats.

You should ideally move as few times as possible and that would lead me to say find a 3 bed house in the right area that can be extended to suit your future needs. Don't spend money moving and use that money to refurbish, renovate and extend.

The trick is finding the perfect area first time

Very unlikely you will find value increases the way people would have done pre-rate rises in any area, maybe a very top end exclusive post code but not the average areas that most people live in.

Do not all houses in London go up in price since it is London? The interest rates are also going down and when that happens house prices go up so if in 5 years we have a low interest rate I should be able to sell the house for a profit. Is this not correct?

RHemmings

Uriziel said:

ReadySteadyPop said:

TroubledTarts said:

Uriziel said:

Tabieth said:

My advice is definitely not a studio. Harder to sell and less comfortable to live in. Personally I’d rather get something that’s big enough for me to expand into, that I can afford without a lodger, but isn’t too big. For example, I live alone and I’ve just bought a 2-bed terrace house. Originally I was open to flats or houses but houses are the better option. Having been burned in the past, I’d avoid leasehold at all costs. I could have afforded 3-beds in a less desirable area but 1) I don’t need 3 bedrooms and 2) location is key. 

I noticed that I can afford 3 bedroom houses. The thing is that I would not want to stay there permanently and plan on buying something bigger in a few years. If I buy a 3 bedroom house in London is it likely to sell for a profit? The plan is to continue saving money and get a couple of payrises so that I can buy a larger house later down the line.
If I want to sell it on a profit I would have to make enough money to pay off the mortgage with the interest rate. Are house prices going up faster than the interest rates? I'm not sure if this would work or not.
People seem to be very unhappy with leaseholds and are saying that houses go up in price more than flats.

You should ideally move as few times as possible and that would lead me to say find a 3 bed house in the right area that can be extended to suit your future needs. Don't spend money moving and use that money to refurbish, renovate and extend.

The trick is finding the perfect area first time

Very unlikely you will find value increases the way people would have done pre-rate rises in any area, maybe a very top end exclusive post code but not the average areas that most people live in.

Do not all houses in London go up in price since it is London? The interest rates are also going down and when that happens house prices go up so if in 5 years we have a low interest rate I should be able to sell the house for a profit. Is this not correct?

House prices in London have risen slower than the rest of the country since 2016. https://www.black-brick.com/insights/in-the-press/london-home-values-rise-but-growth-outpaced-by-rest-of-uk/

Remember that past performance is no guarantee that future performance will be similar. 

In the near future, changes to stamp duty are driving a lot of sales now, which may (or may not) be balanced by a lack of sales later.

Things are much more complicated than some people suggest. You pays your money and you takes your chances. 

ReadySteadyPop

Uriziel said:

ReadySteadyPop said:

TroubledTarts said:

Uriziel said:

Tabieth said:

My advice is definitely not a studio. Harder to sell and less comfortable to live in. Personally I’d rather get something that’s big enough for me to expand into, that I can afford without a lodger, but isn’t too big. For example, I live alone and I’ve just bought a 2-bed terrace house. Originally I was open to flats or houses but houses are the better option. Having been burned in the past, I’d avoid leasehold at all costs. I could have afforded 3-beds in a less desirable area but 1) I don’t need 3 bedrooms and 2) location is key. 

I noticed that I can afford 3 bedroom houses. The thing is that I would not want to stay there permanently and plan on buying something bigger in a few years. If I buy a 3 bedroom house in London is it likely to sell for a profit? The plan is to continue saving money and get a couple of payrises so that I can buy a larger house later down the line.
If I want to sell it on a profit I would have to make enough money to pay off the mortgage with the interest rate. Are house prices going up faster than the interest rates? I'm not sure if this would work or not.
People seem to be very unhappy with leaseholds and are saying that houses go up in price more than flats.

You should ideally move as few times as possible and that would lead me to say find a 3 bed house in the right area that can be extended to suit your future needs. Don't spend money moving and use that money to refurbish, renovate and extend.

The trick is finding the perfect area first time

Very unlikely you will find value increases the way people would have done pre-rate rises in any area, maybe a very top end exclusive post code but not the average areas that most people live in.

Do not all houses in London go up in price since it is London? The interest rates are also going down and when that happens house prices go up so if in 5 years we have a low interest rate I should be able to sell the house for a profit. Is this not correct?

What are you thinking will cause this, if it is a recession then it will be vey hard to get your money back on the house.

There are some interesting stats here;

https://propertyindustryeye.com/what-is-currently-happening-in-the-uk-property-market-40/

MeteredOut

Uriziel said:

ReadySteadyPop said:

TroubledTarts said:

Uriziel said:

Tabieth said:

My advice is definitely not a studio. Harder to sell and less comfortable to live in. Personally I’d rather get something that’s big enough for me to expand into, that I can afford without a lodger, but isn’t too big. For example, I live alone and I’ve just bought a 2-bed terrace house. Originally I was open to flats or houses but houses are the better option. Having been burned in the past, I’d avoid leasehold at all costs. I could have afforded 3-beds in a less desirable area but 1) I don’t need 3 bedrooms and 2) location is key. 

I noticed that I can afford 3 bedroom houses. The thing is that I would not want to stay there permanently and plan on buying something bigger in a few years. If I buy a 3 bedroom house in London is it likely to sell for a profit? The plan is to continue saving money and get a couple of payrises so that I can buy a larger house later down the line.
If I want to sell it on a profit I would have to make enough money to pay off the mortgage with the interest rate. Are house prices going up faster than the interest rates? I'm not sure if this would work or not.
People seem to be very unhappy with leaseholds and are saying that houses go up in price more than flats.

You should ideally move as few times as possible and that would lead me to say find a 3 bed house in the right area that can be extended to suit your future needs. Don't spend money moving and use that money to refurbish, renovate and extend.

The trick is finding the perfect area first time

Very unlikely you will find value increases the way people would have done pre-rate rises in any area, maybe a very top end exclusive post code but not the average areas that most people live in.

Do not all houses in London go up in price since it is London? The interest rates are also going down and when that happens house prices go up so if in 5 years we have a low interest rate I should be able to sell the house for a profit. Is this not correct?

Yes, it's not correct. And as well as the responses you got above, you can't assume BoE base rate changes will immediately flow through to mortgage rates.

Unless you're buying a property to invest in, my advice is always to buy a house you want in a location you want for a price you can afford even if interest rates go up. Never assume you'll be able to sell for a profit.