AIBU to prefer a £500k flat over stretching to £800k?

[steig]

I have been with DP for about 8 years, lived together in a rented flat for 5 of those.

I would like to get on the property ladder sooner rather than later. Looking at a 2 bed flat and would be happy to rent the second room out to a friend of mine or DH’s for a year or two to help us save money.

I’be found flats in OK areas of London for around £500k. DH wats to look at ones for around £800k.

We have to live close to DH’s teaching hospital so moving far out is not an option. At £500k flat we could easily put money into our ISAs and save or have the flexibility to rent the flat out if we had to move out of London. At £800k the figures don’t make sense to rent out and we would lose money every month.

I agree with you. I think buying higher end of budget without any need is very unwise.

I used to be of the 'extend yourself, better in the long run' opinion. But now, older, wider (and poorer) and looking at a very uncertain world I am 100% with you.

Yes agree - I was always too conservative to extend myself, which in hindsight was foolish as I would have done well to 15/20 years ago when I was first buying.

But now with interest rates, flatter property growth and an uncertain world I would be far less willing to extend myself.

Our current mortgage is very manageable income and multiple wise, but it still feels like a burden (despite being <half what the bank offered us!) and I am overpaying heavily to get it down while I can.

Yes I’ve not watched Location Location Location for years but recently noticed Kirsty’s changed her tune!
OP I would just be careful of ones nearer your lower budget but with a higher service charge. Also if a conversion, check all flats in the building are owned (not HA - not because anything wrong with tenants, but because communal decorating tends to be carried out every 5 years which is good but expensive and the standard is poor as never checked).
But I would definitely agree to proceed with caution and look at the £500,000 mark.

Flats in London are losing value, not gaining. Stick with the cheaper one.

If you were buying a house out of London I’d probably say stretch yourself. But the London flat market has been terrible for years with many struggling to hold value. You’ll probably be ok and it will just about keep pace with the market, so you can at least look at what you save on rent as a bonus- but London flats are real trouble at the moment- so I’d put as little as possible into it

You have a huge choice of flats for sale in London now you can probably get a great cheap deal. Don’t spend £800k on a flat it’s too risk. You need to account for service charges going up and down too.

Ps two adults sharing one room and then renting out the other is horribly cramped.most couples use the second room for extra strorage space or desk for remove working. Make sure you get two bathrooms if you’re going to do this,