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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to tell my friend I think she's making a huge mistake buying an ex council studio flat for 200k on the outskirts of London at 35 when she doesn't earn much

183 replies

entiledornot · 14/02/2015 20:54

My friend is an estate agent in London. She's currently living in shared houses but wants to buy something. She's had her offer accepted for 200k on a small ex council studio. She has only ever seen house prices rise in her few years as an ea so she thinks this flat will be her way to a millionaire rather than somewhere to live. She only earns 20k and is making virtually no commission as the housing market is dead. Shes looking at it as an investment not a home and can only afford it as parents have given her 60k. If interest rates rise even a bit she will be screwed and she will be paying back for this tiny studio until she is in her mid 60s.it isn't in a great area, zone 3 20 min walk from any tube. Prices are already in a bubble and this could pop at anytime.

Should I just stay quiet or tell her my concerns?

OP posts:
MrsTawdry · 14/02/2015 20:55

YABU.

nequidnimis · 14/02/2015 20:57

I can't see that you'll be telling her anything she doesn't already know, so what's to be gained by telling her?

edwinbear · 14/02/2015 20:57

YABU. Well done to her for getting on the property ladder.

kewtogetin · 14/02/2015 20:58

Keep your nose out, she's 35, works in 'the business' and can obviously afford it or she wouldn't have had a mortgage approved. I'm sensing jealousy from you.

MistressDeeCee · 14/02/2015 20:59

Well technically she's paying 140k for it as she's had help. So to her, it may be a bargain. However YABU - she's a grown woman speculating to accumulate, you never know she may do well, & its up to her

CliveCussler · 14/02/2015 21:01

Yabu. She's a 35 yr old estate agent.

PopularNamesInclude · 14/02/2015 21:01

I have watched London house prices rising steadily for over 20 years. They dip but come roaring back, fueled by foreign money. any investment is a risk, but this is a better bet than many. yabu

Babayaggatheboneylegged · 14/02/2015 21:03

Prices in London are only going to go one way - up. Do you seriously think she'll end up in negative equity? What do you think she should do instead? Throw money away on private rentals?

Tollygunge · 14/02/2015 21:04

The housing market isn't dead where I live. It's fucking mental! I'd also far sooner live alone in a studio than in a house share. Plus she could rent it if the bubble does burst. Where is it in London? Or is that tmi? Grin

Fuckmath · 14/02/2015 21:05

Yabu

And zone 3 is not the outskirts of London!

Where is it, roughly?

Trills · 14/02/2015 21:06

She's 35 and living in a shared house.

It won't just be about having an investment or getting on the property ladder.

It'll be about having a place of her own.

NoArmaniNoPunani · 14/02/2015 21:06

I think she's doing the right thing

EdithWeston · 14/02/2015 21:06

As she's an estate agent, she's probably well clued in to which properties are well priced. Even with current uncertainties, if she's in it for long haul she'll be OK. Are you an estate agent too?

As zone 3 is hardly outskirts, especially not these days when next to no-one (non-oligarchs) can afford to live centrally.

ilovesooty · 14/02/2015 21:06

I don't see that it's any of your business.

Fuckmath · 14/02/2015 21:07

Tbh I than think of some "not great" areas in zone3 that IMO are on the up. So she may well make some good money on it. I wonder if my hunch is right about the location. SW?

DrinkFeckArseGirls · 14/02/2015 21:09

Where did it say she's 35? Confused

NoArmaniNoPunani · 14/02/2015 21:10

In the title Drink

Cantdecideondinner · 14/02/2015 21:10

Sounds pretty sensible to me snd about the going rate for that part of london. Zone 3 isn't far out of central London and I don't believe that london prices will drop plus she's an estate agent so she probably knows more than you not to mention the fact that she's probably feeling far too old to flat share and is desperate for a place of her own. There are still some really low 5 year fixed rate mortgages at less than 3% so the chances are that she's relatively protected from rate rises for the foreseeable future anyway.

BrockAuLit · 14/02/2015 21:11

I don't think there's anything wrong with voicing concerns between friends, but please don't think that you are right and she is wrong. Nobody can have anything more than an educated guess of where the housing market will go. And frankly, given her age and occupation, it seems her guess may well be pretty educated.

threepiecesuite · 14/02/2015 21:11

I'll still be paying my mortgage in my 60s. I hope to still be alive and working by then.
Sounds as though your friend has made a wise move. £140k isn't much to owe, in London.

ThereMustAndShallBeTea · 14/02/2015 21:11

Ha, I would guess SW too Grin

listsandbudgets · 14/02/2015 21:12

As long as she's taken possible costs she'll face as a leaseholder into account YABU. If the block is in good conditon and does not require any major repairs then she'll probably be alright but if not she should proceed with caution or she could find herself with a huge bill from the freeholder. However if she's in the business she'll be familiar with the risks

ReallyTired · 14/02/2015 21:15

At the moment she can get a 2 % mortgage fixed for two years. It is cheaper for her to have a studio flat than to rent a room. It is also a better quality of life. Even if she has a repayment mortgage it is cheaper than renting. With that level of deposit she will not find herself in negative equity.

It is a hell of risk, but if she pulls it off then she will do well.

Tobyjugg · 14/02/2015 21:38

Has she factored in ground rent and/or service charges?

MonkeySeeMonkeyDooo · 14/02/2015 21:38

If it's zone 3 and SW, then it's not the outskirts and house prices are just going up and up.