London Mortgage - are we crazy?

[EllaWt]

Hello,
I realise this will seem outrageous to some of you but I could really need your wise advice.

DH and I are about to buy our first flat. We live in London and despite Brexit and all , it's still really expensive.

We both have good jobs and a joint income just short of £300k/year . We also both have good earning potential in our jobs. We're young-ish too being both 32. No kids but hopefully soon.

We're about to buy a flat for £1.2m with 15% deposit and have secured a good rate.

Part of me is excited but part of me think we're mad to take on an approx £1m mortgage. The flat itself is in a very special and desirable location and can be turned into a gem with a little TLC

Doing all the maths, it's do-able on a monthly expenses basis and we're pretty much wiping out our savings.

If all goes well, we should definitely be more comfortable in a year or two once we'd had bonuses etc... but it's still so much money and risk to take on

I really don't know if we're doing the right thing or just being overly optimistic, silly and overstretching ourselves.

Our parents are not in the UK and we have no one to give us advice really. Has anyone here done something similar ? Does this all sound crazy to you ? or do you think it's fine?

Thank you SO much

Fwiw some areas just outside of London have a quicker commute in to parts of London than a London area to London area commute

We're looking at prime central london so a full freehold is out of budget.

We've considered moving further away / outside London but neither of us is up for suburban living. I don't mean that in a bad way but we're not from the UK we're just not sure outside of London would work for us.

Uh I don't think we should do it now ... major doubts

Agree with PPs, bit odd to go for a flat when you're already 32 and hoping for children.

Unless you're doing it purely as an investment as you say you could make it amazing. In that case, will you have enough money left over to do it up?

OP, what do you mean you aren't up for suburban living? Just quieter outer suburbs or anywhere outside zone 1?
I used to live 'Between the Commons' (Wandsworth and Clapham) and I think that area could suit you. Trains from Clapham Junction go into Waterloo every 2 minutes (just 1-2 stops to go) and Northcote Rd has got plenty of fancy bars, restaurants and shops. I think there's a French primary in Clapham and then the children can continue at the school in South Ken for secondary (you'd need to double check that bit). For your budget you'd get a smaller house and you'd definitely feel in London.

OP my figures are no where near yours but I think the principles are the same. If you know you want children soon I really urge you to buy something that is pretty future proof, not just a few years, but perhaps even forever-ish home stuff. We bought what we could but have quickly out grown it and now in a really tricky situation of needing to sell and buy which I feel sick about, Brexit NOT helping. I wish I could go back and tell myself to hang tight for a couple more years and buy something that will last. Ordinarily I would say you're pretty safe in London, likely to make money and sell easily when you need to, but it seems to be changing in London at the moment and with Brexit I wouldn't bank on it too much.

1.2 is an insane amount of money to make such a big compromise on, location is paramount but I do find it quite difficult to believe you couldn't find something bigger within budget in a convenient location. But I'm quite British in my love of houses rather than flats!

Obviously factor in maternity leave, childcare and interest rate rises too, just stress test your finances to check the figures.

@pimbee and everyone - i really apologise for not giving enough details to start with (i'm a newbie) but would you consider the fact that the property is a 3 bed 2 bath small garden "future proof"?

I would wait OP, in your situation. It doesn't sound like you think you might be in the UK for the long haul so it's really quite bonkers to be spending this amount of money short term.

Fwiw though, I think a maisonette with DC in central London location is fine. As long as it's 2+ bedrooms and has a garden.

@JoJoSM2 I think everything that has an over 30min journey to work is difficult.... i like clapham but it's a bit annoying for the City ... those trains aren't reliable.... but you make me question my beliefs and I think we should perhaps at least visit houses there... i know i know i am way too difficult for my budget- sigh

I would go for it without hesitation.

If the school is the lycee, the area is great.
Stamp duty moving again would be grim but you don't have to with 3 beds and a park opposite. A short commute is gold dust!

I think you're probably in a good enough position to go for it - DH and I bought our first place together when we knew it was nearly the top of the market (2007), it all crashed within the year but we still sold the flat 4 years ago for over 50% more than we paid for it.

If the place will be good for you for a while, then it's not use second guessing the market, just think of it as your home, not an investment, and go for it.

But do be sure it will suit you for a while.

Our first flat was only intended to be for 4 or 5 years, but we were there for nearly 8 in the end because twice we were just about ready to move when one of us lost our job! Fortunately we'd spent money on extending the tiny second box-bedroom into a small double so we were able to live there OK with two young children sharing that room.

@EllaWt only you can decide that. Me being outside London I want a 4 bed detached house with garage and study, I work from home, my husband likes cars, and we have 2 children and need a 4th room for storage so that's why my threshold is there. We currently live in a 3 bed semi with garden and driveway but it's too small for the 4 of us (very small 3 bed) and I now need to work from home more which I have no space to do.

I suppose remember (sorry to sound patronising!!) that your lifestyle will change with children and you're likely to be at home more, probably won't be benefiting from those zone 1 links quite as much, so it needs to be comfortable enough to not make you stir crazy (and it may well be, I don't know the square footage). Could you discuss with colleagues who have families about where they like to live?

It's possibly very cultural too, if you're not from the UK originally your expectations may be very different, Brits haven't traditionally been as comfortable with apartment living as other countries. There's been studies on this!

But it's very, very personal. With property you do need to follow your gut and if it makes you happy and if the figures add up for you don't put other people's expectations on yourself.

Future proof for me in this case would actually include being easily able to sell it on in the future, not just whether you could live in it long term, so maybe think about that too?

Tbh, I don't think I ever found Clapham Junction trains unreliable but rammed and needed sharp elbows to get on... Probably true of anywhere quite central, though.

If you really love the maisonette, then go for it. 3 beds, 2 baths and a garden is probably similar to what you'd get in a house.

In terms of having a quality family area, I'd be checking distances to parks, playgrounds, leisure centres, sports clubs (if you want kids to play tennis etc), activities available locally etc.

If you do decide to explore zones 2-3, you could look at the tube/train lines taking you to work. 30mins door-to-desk is definitely doable but French schools will be quite a limiting factor too.

Plenty of people live happily and raise families in flats/maisonettes in city centres, OP. Some never want the suburban semi in commuterville or the rural idyl.

If you like other areas where you could get a little more square footage for your money without a crippling commute, then it might be worth having a look but don’t feel bad about preferring a city centre location over a suburban one.

the advantage of a bit more space is that you could have an au pair or live in nanny which can be more cost effective when you have more than 1 child & more convenient.

I totally get where your coming from though re city life & think it would be amazing to live in zone 1!

You won’t get a house around Northcote road for 1.2
I also think future proofing is what you need to do. Moving costs so much money.

Talking future proofing - I just moved to my future proof home - a zone 2 three bed two bath flat.

As a couple of others said, a short commute and things I want walking distance away is worth far more to me than a house with garden when there is a park at the end of the road.

I think you need to consider your future lifestyle and what you want from it.

Numbers wise, I think it looks reasonable, but echo others in that I’d have been expecting that sort of property to be more expensive 3 or 4 years ago, so have a look at other sold prices to make sure you’re not getting ripped off!

Honestly I think that's fine.

We have just bought a 4/5 bedroom house in central/west London as we are expecting first baby in December and it does feel very big.

How many children would you like to have? We would like 3 (god willing) which is why we went for such a big property, as we didn't want to pay so much stamp duty to only stay 3-5 years.

I totally get what you mean with wanting to be central. I love walking out my front door and having a good tube line, shops, restaurants and green areas within a few mins or less walk. Plus the schools are good.

It's a big investment but as long as you can service the mortgage you'll be fine. Btw our mortgage is bigger and I was super nervous but it's actually ok.

@pimpee you're not patronising at all - this is so helpful :)

@fancytiles i'm SO nervous and still on the fence but it's great to hear someone in a similar situation is coping ok !

I wouldn't pay 1.2 for a flat/maisonette
Look into Islington - close to the city and lots of nice houses for 1.2

Elwood Street, Highbury Islington, N5
www.rightmove.co.uk/property-for-sale/property-60787344.html

Elphinstone Street, N5 1BS
www.rightmove.co.uk/property-for-sale/property-62417262.html

Also we were in a flat for ages and hated having neighbours walking above us etc.hch prefer living in a house now

We live in a 3 bed house near Clapham South so still on the northern line

Waterdropsdown, Between The Commons is very expensive but sth can be done:

www.rightmove.co.uk/property-for-sale/property-82561610.html

Looking at the garden size, I'm not sure that it's any better than a flat, though...

Another thing to consider is if you're buying super central, how much of a community is there. I have friends who bought in Mayfair as they were loaded and thought it would be nice but it's just loads of empty houses owned by foreign investors. They ended up moving to Zone 2 and buying something bigger and nicer with houses with actual people in them who said hello in the mornings etc.

May sound trivial but honestly if you live in London (or anywhere) that sort of thing is lovely. Where I live (zone 2) we all have a street WhatsApp, we are friends, we borrow washing machines when ours break etc and it's really nice, especially once you have children and they have nice local friends.

Apologies if you are not buying somewhere like Mayfair. But I like you have an aversion to suburbia (I suppose we all have our own definition) but am very happy here where I can walk or cycle into the central bits when I want (not that often tbh, apart from work), and where I also have a nice community and fresher air.

I am 32 and just had my first baby. Our income is half yours. We are just about to borrow £500k for a future proof (4/5 bed) house in zone 3 but our deposit is 40% as we made equity.

When we bought the house (2bed but a house) we are selling, being physically close to zone 1 seemed very important (we are on the edge) and we would have bought in Bloomsbury if we could have. We again thought about a flat in Bloomsbury now as our budget could have been £1m but we want a house not a flat because of space and being able to get away from each other for noise. Clean air and safety have suddenly become much more important to us since the baby is a reality and we wanted a house with a proper garden and access to more green space. We also need spare rooms for grandparents and aunts and uncles to visit as we didn’t grow up in London.

But I have friends who are happy with one or two children in the sort of space you describe. They are mostly European by birth. There are fab communities in some of the places they live (Bloomsbury, wapping, Bermondsey street) and they are actually great places to have kids. They’re just not great for me to have kids in. Think carefully about how you live, how much it is costing you to move, and whether where you are living could actually be a good place for a baby (space for a pram in a maisonette often an issue). If so, go for it.