Major doubts about buying a flat

(40 Posts)
alazuli Wed 27-Apr-16 16:49:31

From the moment my offer was accepted I've been having major doubts about buying a flat in London. I actually felt physically ill after they called to tell me for several days afterwards.

I'm not sure if this is my instincts telling me this isn't the place for me or whether it's just my fear of commitment/change coming out in force. I've lived in my current houseshare of 10 years. Plus, it just seems like so much money!

I'm on a very small budget so it's all I can afford and it does tick all of the boxes but it's a studio flat and I can't imagine living there for more than a few years as I'd like to settle down and family quite soon once I find the right man.

Help!

FrikkaDilla Wed 27-Apr-16 16:55:28

I think you should trust your instincts. Read other threads on this subject - people believe that a crash or certainly a softening is on the cards.

You should be feeling excited and happy and your gut instinct is telling you something else.

FrikkaDilla Wed 27-Apr-16 16:58:04

Almost forgot; this is an interesting website www.housepricecrash.co.uk/

mrsmeerkat Wed 27-Apr-16 16:59:00

I would pull out. I met my dh soon after taking on a huge mortage and we were stuck in a small property for a long time as we wanted children straight away. Can you keep saving and see what happens

Wuffleflump Wed 27-Apr-16 17:03:07

If you meet someone you can sell the flat and you will likely have increased equity to put towards another place with a partner. Money in savings over the same period is likely to reduce in value against London house prices.

If you currently share, presumably this will increase your monthly costs? That does have some effect, as otherwise you could save the difference.

Are you sick of having housemates by now and crave your own place, or are you actually okay with having other people around?

I doubt anyone is going to fall in love with a studio flat, but can you see yourself living there, or will it depress you?

Zampa Wed 27-Apr-16 17:04:20

It might only be for a few years but think of how much rent you won't be paying for those few years.

I personally feel that London will remain buoyant but there are a number of developments coming out of the ground that may suppress prices.

However, if you genuinely don't want to live there, don't buy it. Some nerves are to be expected but you need to enjoy living somewhere.

FrikkaDilla Wed 27-Apr-16 17:16:41

Britain's property market to implode www.msn.com/en-gb/money/homes-propertysection/britains-property-market-is-going-to-implode-as-housing-nears-peak-affordability/ar-BBsgGgO?li=BBoPOOl&ocid=mailsignoutmd

alazuli Wed 27-Apr-16 17:19:04

Yes, it really doesn't help all this talk about another crash. A stagnation in prices would be a good thing as I think part of the reason I want to buy now is that I'm scared prices will keep on rising and I won't even be able to afford a studio in a few months.

alazuli Wed 27-Apr-16 17:21:23

I'm in an unusual position in London in that my rent is super cheap and I live in a lovely area. My mortgage will be more money than I'm paying out now. That plus fees makes me feel like I'm shelling out a hell of a lot of money. If I decided to move in a few years that would be more fees.

I do want to get on the property ladder though. I can see myself feeling at home in this studio but it's depressing that I can't even stretch to a one bed.

FrikkaDilla Wed 27-Apr-16 17:43:09

IMO it's a no brainer then. "super cheap" rent. Have you worked out how much "rent" you will be paying the bank to live in a studio? Have you worked out maintenance costs, insurance, council tax? Fees to buy (and then to sell)

You have been able to save up while renting cheaply. How much will you be able to save if you get a mortgage?

You are lucky living in a lovely area. What area is the studio in?

alazuli Wed 27-Apr-16 17:59:36

Currently in Shoreditch. Will be moving to Walthamstow. Think part of it is that I'll be really sad to leave east London.

I worked out renting v buying. Assuming my studio went up in value by £20k (not sure how realistic that figure is but prices are v high in E17) in the next 2 years, it would be roughly the same. It would probably cost me a bit more to buy as I would need to renovate everything.

Obviously in 10 years who knows how much it'll be worth!

JillyTheDependableBoot Wed 27-Apr-16 19:07:25

Honestly I would buy if you can. Buyer's remorse at this stage in the process is quite normal! Please ignore the housepricecrash doom-mongers - they have been predicting a crash for years and it is yet to happen!

BananaPie Wed 27-Apr-16 20:10:12

Trust your instincts - don't do it!

We made an offer on a place at the peak of the market in 2007, and I felt exactly like you describe - physically sick at the thought of all the money we were borrowing! In the end, we pulled out and ended up buying something else (still at the peak of the market!) but we were very happy there, and I didn't have the sick feeling after we'd made the offer.

Part of the reason we bought in 2007 was because we had the same impression as you - that it was now or never to get on the market - prices looked like they were about to get completely out of reach. In hindsight, that should have been a warning to us - if we couldn't afford it, chances were that the market was reaching the peak of affordability for most first time buyers. Sure enough, we were pretty much in negative equity a few months later, and we sold a few years later for slightly less than we bought it for.

cestlavielife Wed 27-Apr-16 21:39:04

www.homesandproperty.co.uk/property-news/stamp-duty-changes-prices-of-london-starter-homes-drop-by-20k-as-buytolet-demand-falls-a100971.html

IrenetheQuaint Wed 27-Apr-16 21:43:44

Studios can be really difficult to sell in a downturn. If you have super cheap rent and are happy in your current very central house share then you might be better staying put and continuing to save.

alazuli Wed 27-Apr-16 22:50:25

JillyTheDependableBoot - yes, I definitely think it's a case of buyer's remorse. I'm bad enough as it is with clothes, let alone a flat...

BananaPie - where did you buy? I guess I wouldn't care so much about negative equity if I knew it was a place that I'd been living in for many years.

FrikkaDilla Wed 27-Apr-16 22:59:53

That's right Alazuli. If it was a home for a long time then negative equity doesn't matter. But if you need to sell then it's a huge problem. I can see20 - 30% coming drops ahead.

alazuli Wed 27-Apr-16 23:12:02

Even in London?

cestlavielife Wed 27-Apr-16 23:22:35

20% drop in London means a 500k 2 bed flat (one of those which was a nice 1 bed but they turned the kitchen into a bedroom and stuck some kitchen units in the living room....) becomes a 400 k 2 bed flat. This would be a flat which was probably 300k 2.5 years ago. So still expensive but not quite as bad.... bad for anyone who bought at 500 k with big mortgage.

alazuli Wed 27-Apr-16 23:34:09

And still too expensive for a single lady like me!

cestlavielife Wed 27-Apr-16 23:40:44

Why don't you look at a one bed share to buy
lots in East London ?

cestlavielife Wed 27-Apr-16 23:41:23

Then you have somewhere you could stay longer even with a baby

alazuli Wed 27-Apr-16 23:48:47

Shared ownership? The ones in east London are so expensive - the rent portion is really high and the full value is usually around £400-500k even for a 1 bed so I could potentially never staircase to own the whole thing.

ThePartyArtist Wed 27-Apr-16 23:53:29

I was in a similar position when I was in a house share. In the end I worked out it wasn't home ownership I wanted - it was a better standard of housing and a rented flat with my DH. Think about whether that is the reason you are thinking of buying and if it is, use your money to rent something you like more than your house share.

Also if you are buying for a HOME not an investment, go with your gut instinct that the flat is not right. It would be a pity to live somewhere you didn't like because it was the sensible choice investment-wise. Property is just one way of investing money - there are other options like stocks and shares, ISAs etc.

Maybe pull out and then assess whether it was the general process that stressed you out, or the characteristics of this particular property? If you decide the former, you can reconsider buying at all. If the latter, view other types of property and see whether you feel differently about them.

My sympathies though... I was feeling so stressed during our house hunt and couldn't work out if it was the house buying process in general, or the particular house we were trying to buy.

alazuli Thu 28-Apr-16 00:01:22

Thanks, ThePartyArtist. The house buying process just feels so rushed and high pressured in London. You get to see the property along with loads of other people at an open day. Then it goes to sealed bids a few days later. I've had more time to think about buying a jacket than I do this flat.

I guess I feel the same - I'm not sure whether it's the process I find so overwhelming or whether it's because this flat isn't the right one for me.

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