Upgrading from Flat to House in SW London

[planforeverything]

Close your eyes for those of you who don’t live in London as the prices I’m about to mention will make your (and my!) eyes water...

I’m basically looking for advice and guidance on how to upgrade from a Flat to a house in SW London in the next couple of years and I want to know how people have done it and made it work (i.e stop have money to be able to leave the house for a coffee).

We lived in Bristol for 4 years and made enough money on our house to buy a flat in Putney 12 months ago for £770k. Neighbours identical Flat is on the market for £850k and have just had an offer at £815k which they aren’t accepting.

We want to move to a 4 bed house in SW London in approx 2-3 years time. We need to be in SW London for work (we don’t work in the city).

What I’m struggling to get my head around is - how are we going to do it?!

We have £180k equity and I’m hoping in 2-3 years we’ll get about £250k and have enough saved for stamp for a house around £1.2-£1.3m. Which means £1m mortgage which seems eye wateringly high. Is this the norm?

We each earn £80k and honestly, we are not flush. We are careful with our money as our mortgage is big and save what we can and have no credit card debt.

Our mortgage is £2400 a month and whilst I know we could mortgage ourselves to the high heavens, I’d like to stop work and have a baby in 3 years or so but maternity is awful where I work and there’s no way my husband could afford a mortgage on his own. I would absolutely have to go back to work after 6 months full time.

For those who have done the upgrade - how?! Any tips? Stepping stone in to a smaller property first to make money on then go for what we want? Most of the houses I’m seeing are more like £1.5m so even at £1.2-1.3 we might struggle to get what we want.

Any advice would be greatly appreciated - if were wasting our time I’d rather know now so we can come up with another plan.

Neither of us are bankers so don’t get huge bonuses so it’s not an option to make overpayments.

You have very little equity relative to property price. Focus on staying put and overpaying the mortgage rates than waste money on moving fees.

The larger the mortgage the larger the % deposit they like.

Affordability one you have a child will kick in.

You don't earn enough to have a mortgage of that size- realistically you need to each be on close to double with a decent deposit. Look at how much the stamp duty alone is. £160,000 and £120,000 would get you a £1.3 million mortgage with 1 child and no childcare costs (so unrealistic)

I think you’re pitching way above your level.

In London terms you’re on very average salaries but your property expectation are more like family income of £200K plus

And your child care costs will be eye watering.

Could you look at the cheaper bits of SW London that have good transport links into London Bridge - ie Streatham / Streatham Hill?

Now you know why people move back North. Maybe it wouldn't be the worst thing in the world?

We moved from a 1 bed flat in Putney to a 4 bed house some years ago. We did this by buying a house that was in need of total refurbishment. Financially it was the best thing we ever did but it was extremely tough as we did a lot of the work ourselves while living in the house and holding down jobs.