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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:
MomDirection · 15/02/2015 08:54

There is nothing concerning about your friend's decision, seems perfectly sensible to me.

labelwriter · 15/02/2015 08:56

Whereabouts in London is it?

eurochick · 15/02/2015 09:04

If you think streatham is on the outskirts on London, you are really best off keeping your views to yourself.

Sleeplessinstreatham99 · 15/02/2015 09:08

Namechanged for this.

We bought a house in Streatham 5 years ago for about £750k. It has almost doubled in value, and we are approached by estate agents on a regular basis. So if the past few years the house has earned more than DH and I, and we are both on high salaries.

If your friend is only on 20k perhaps she is unwise, but don't slag off streatham!

Sleeplessinstreatham99 · 15/02/2015 09:10

Ps buses are great from streatham as is the overground. You can also cycle into London in less than 30 mins.

Blu · 15/02/2015 09:18

It's possible that the view from a 'proper house' an area of onb , with it's bridges etc, is somewhat dim. Fog, mist, distance etc.

Latara · 15/02/2015 09:19

I was on 26K aged 30 when I bought my house with an inherited deposit. I was very lucky I know.

Now I'm 38 and 'down on my luck' thanks to illness with an approx. 16K job but my fixed rate repayment mortgage is a lot lower than renting around here (South coast), and I can always work extra shifts in my job.

If I was totally desperate I'd live on baked beans in the freezing cold rather than share flats again so I would say YABU, your friend is doing the right thing and it will be a good investment.

Besides if she still has a studio flat at eg. 60 what's wrong with that? My mum lived in a studio flat at 60, she is in a bigger retirement flat now and can't afford the maintenance so may have to go back to a studio flat.

juniorcakeoff · 15/02/2015 09:28

ghosty the OP sure does have a lot of worries Grin

Capricorn76 · 15/02/2015 09:29

Under new mortgage rules (MMR) the bank would've 'stress-tested' her finances to ensure she can cope with a rate rise. She wouldn't have been able to get the mortgage if she'd failed the test. She'll be fine. Be happy for her.

ScrambledSmegs · 15/02/2015 09:30

Streatham 'outskirts' of London? House market 'dead'?

Y 'ave no clue of what U speak.

JadedAngel · 15/02/2015 09:30

This reply has been deleted

Message withdrawn at poster's request.

DrinkFeckArseGirls · 15/02/2015 09:32

Sarah Beany lives in Streatham so it must be good Grin I've seen so great houses and streets there.

Binkybix · 15/02/2015 09:34

Streatham is quite far out but I wouldn't call it outskirts!

Binkybix · 15/02/2015 09:34

And there are lots of nice houses there.

Postchildrenpregranny · 15/02/2015 09:34

My daughter is paying £860 for a one bed flat in SW15 . A mortgage would be less !
Long term property prices in London always go up

Capricorn76 · 15/02/2015 09:39

Plus Zone 3 is nowhere near the outskirts! Zones 2 and 3 are where the life is.

Fluffycloudland77 · 15/02/2015 09:39

There's not going to be a property crash. Not in London, not anywhere.

Everyone keeps wetting their knickers over a crash & they really want to be right so they can gloat but no.

Pipbin · 15/02/2015 09:47

Fluffy. I remember waiting for the crash in 1999. I was convinced the arse was going to drop out of it all and was worried for my friend who bought a 2 bedroom flat in Brighton for £80k. No way would we make that silly mistake. Hmm

DrinkFeckArseGirls · 15/02/2015 09:55

Thanks armani I'm in the app and not the full title is showing.

lurkerspeaks · 15/02/2015 09:57

As someone only a little older there is no way I could carry on living in a house share - if the only way I could avoid it was a studio flat I would do it.

I want to stay in zone 1 and a studio has been in my option lists for purchase.

I can't see london property dropping much tbh - stagnanting yes, but dropping, no and the rental market is going to remain buoyant for as long as big deposits / are required for mortgages.

Damnautocorrect · 15/02/2015 10:00

I was told 15 years ago not to buy a flat for 125,000 in London. Was worth 220,000 after 3 years. That flats now worth 275,000.

Yabu. Leave her to it, renting and shared houses is shit. Leave her to have her home

thehumanjam · 15/02/2015 10:03

I'm not sure she will find a lender who will offer her 7x her salary.

StreathamHillary · 15/02/2015 10:04

People living in Streatham enjoy the best Jazz Club and music venue in London (according to TO) at The Hideaway, top rated pizza café Bravi Ragazzi, pubs in which the likes of David Harewood drink, a 'top 10' pub in the Earl Ferrers, a new ice rink and pool, a cinema, great schools and although expensive in cash terms - ridiculously so as anywhere in London is - it is less ridiculously priced than any area with comparable benefits.

I hope your friend is happy in her flat and successful in her job. Personally I would advise anyone against having to drive 2 hours to and from work every day, for a range of reasons. But there you go.

ShadowSpiral · 15/02/2015 10:18

I'd be a bit concerned if I thought that a friend was stretching herself financially to buy a property she didn't want to live in, and wouldn't be able to cope with even a small rise in interest rates - I'd be surprised if interest rates didn't rise within the next 5 years, let alone 25 years or however long her mortgage is for.

Having said that, I'd assume that most 35 yr old estate agents will have had the sense to think these things through, and will be more aware than you of which areas are good ones to buy in.

I'd also keep my mouth shut unless I was directly asked for my opinion. Even if you're completely right and she really hasn't considered any of the things you worry about (unlikely), she's not likely to welcome your advice. I know I'd consider it to be interfering, patronising, and none of your business, if a friend started telling me "their concerns" about this kind of thing.

Eltonjohnsflorist · 15/02/2015 10:26

People thought earlier new x friend was mad for buying there ( new build estate in the wilderness near millwall) on 120% mortgage at 23. She's had it 10 years - in all honesty it's not the worlds best investment ( service charges, lease extensions, property prices haven't risen manically for 10 years) but she has made money and most of all she's lived there 10 years. It's her home. If she sold now she would've effectively lived there free for 10 years rather than rent. That's really what buying a house is about, surely? Her standard of life will be so much better than in a house share