What would you buy?

[quesomanchego]

I finally decided to buy a flat in London and I'm going round in circles trying to decide between the following options:

1. a "cheap" 1-bed, around 350K - this would be good for now, and would mean a very comfortable mortgage that I could overpay and cover with rent if I want to leave.
2. a more future-proof 2 bed around 450K - would give me more space and could fit a partner & a child, should I have both in the future, plus if it comes to the worst I could maybe rent out the spare bedroom, but the mortgage would be considerably higher. If I want to move out, I would not be able to cover the mortgage payments with rent after paying the taxes (I'm in the 40% band), so would need to sell.
3. There is obviously also option 3, a very cheap 2 bed, and option 4, a nice expensive 1 bed, but I have ruled them out for now.

What would you do? I'm single and I don't know what my plans for the future are. There is a possibility that I will want to move abroad at some point, or not, so making the flat as easy to resell as possible is probably key.
Both options seem risky, just differently...

Can you imagine life outside zones 2-3? You could get a 2 bed Victorian cottage for under 400k further out (zone 5 or so). Or a lovely 2-bed flat for 325-350k.

2 bed cottages more realistically priced 450-480 I’d say

I think there is loads to suggest getting a 2 bed, much more flexibility and saves you outgrowing a place v quickly and being ‘forced’ to move. Much easier to rent out too

Why do you think you wouldn’t cover mortgage with rent if you rented out? If that were the case, wouldn’t you do interest only mortgage for a couple of years?

Which part of London are you thinking of? Two beds are coming down in price- one beds will fall the furthest and/or be more difficult to shift.

@JoJoSM2 I can imagine life outside of zone 3, but not so much life in a tiny cottage alone. A cheaper 2 bed farther out would be an option, as long as it's still reasonably connected, but wouldn't this be very difficult to rent? Plus, for 350 it would rather be zones 5+, wouldn't it?

@DespairingHomeowner it's a rough calculation, I may be wrong. But a 350K mortgage would mean something between £700-£900 repayment per month, depending on terms, deposit etc. If I need to or want to move, I need to rent my flat out for 1200-1400 to break even after tax. This seems doable and if it's not I would probably be able to cover the mortgage from my wages wherever I work for some time. It's still not ideal long term, but makes the whole thing seem more manageable. Adding the 100K to the mortgage translates to about £400 more repayment, so at least £600 more in rent, which seems quite a lot for a 2 bed in some not very central location.

@Lightsabre

Which part of London are you thinking of? Two beds are coming down in price- one beds will fall the furthest and/or be more difficult to shift.

I don't know yet, I'm literally looking everywhere right now. Probably wherever I can find something nice in my price range, this doesn't seem to be that many places haha. As pretty much everyone, I work in central London, and want something nice, well connected in a non-scary area, but I guess I will need to make some painful tradeoffs. Most of my friends are in (N/S)E, but I'm quite open to options.

I’m in Sutton, zone 5 and you’d definitely get a nice 2-bed flat for 350k. The trains go into Victoria, London Bridge and St Pancras or it’s a bus ride/Uber from the tube if you’re out till 3am. There are gyms, yoga and dance studios, a nice cinema, cafes, restaurants and shops. Definitely non-scary.

The rental market is v good based on own and friends’ experience as you get young professionals who work locally (a couple of large hospitals, schools and colleges, some quite companies in the offices in the town centre).

Generally, if you look in outer London you’ll have non-scary options but you won’t get that trendy vibe that zones 2-3 get. I’d seriously consider that trade off given the economic climate. And it’s not that much of a bother to get on the train for a night out.

[quote quesomanchego]@JoJoSM2 I can imagine life outside of zone 3, but not so much life in a tiny cottage alone. A cheaper 2 bed farther out would be an option, as long as it's still reasonably connected, but wouldn't this be very difficult to rent? Plus, for 350 it would rather be zones 5+, wouldn't it?

@DespairingHomeowner it's a rough calculation, I may be wrong. But a 350K mortgage would mean something between £700-£900 repayment per month, depending on terms, deposit etc. If I need to or want to move, I need to rent my flat out for 1200-1400 to break even after tax. This seems doable and if it's not I would probably be able to cover the mortgage from my wages wherever I work for some time. It's still not ideal long term, but makes the whole thing seem more manageable. Adding the 100K to the mortgage translates to about £400 more repayment, so at least £600 more in rent, which seems quite a lot for a 2 bed in some not very central location.[/quote]
A few points: there are actually ‘ cottages’ to buy in London (eg Cricklewood, Harrow on the Hill) or small 2 bed houses... hard to find compared to flats, not in all areas, & more expensive (but nicer, as it’s a house!). I think they’d be SO easy to rent, but maybe outside your budget

2 beds are coming down, especially without gardens, and are more flexible as a long term move

If you had to rent out, would you be living somewhere as expensive as London? Would you rent somewhere small as it would be temporary?

I’ve lived in a 2 bed for 10 years - brilliant as now have an office, have been able to rent out a room for extra cash to friends etc : would have had to move sooner if it was a 1 bed and no flexibility to have extra income or space for your future plans...

I’m in N London but lots of my friend moved to SE London for more space... I just think skipping a move by getting a 2 bed to start makes so much sense, and it’s definitely definitely a buyers market for flats right now

I’d look into getting a longer mortgage term but flexibility to overpay to increase affordability tbh

Hither Green is a nice area close to Blackheath and Greenwich. Border of Zone 2/3. About 8 minutes to LB and trains to several London stations. Two bed flats are dropping in price quickly now to £325-£350K. Some even going for sub £325 without a garden. Those with gardens are a little pricier.

SE18 houses for between £300-£350K - Plumstead Common is nice and Crossrail is coming soon. Rental on these is £1250-£1400 a month, cheaper by Plumstead High St which isn't as nice but is gentrifying slowly.

I wouldn't bother with a flat unless you want to be in negative equity by this time next year

Sutcliffe Road, Plumstead Common, London, SE18
www.rightmove.co.uk/property-for-sale/property-73295214.html

This is a nice little cottage just off Plumstead Common - reckon they'd accept £325k

Or this in HG , already reduced;

St Mildreds Road, Lee, London, SE12
www.rightmove.co.uk/property-for-sale/property-84549316.html

@DespairingHomeowner

There are cottages well within OP’s budget. Eg the one lined up thread.

Or these two early Victorian properties priced at 350k and 420k:

www.rightmove.co.uk/property-for-sale/property-97746371.html

www.rightmove.co.uk/property-for-sale/property-85164925.html

Or this much older, listed cottage for 320k:

www.rightmove.co.uk/property-for-sale/property-78240604.html

Wow! They are lovely cottages ... I wish my work allowed me to live in Sutton, so much better value than NW London!

You should be able to buy a 2 bed Victorian conversion flat in Brixton for around the £400K mark - so long as it is in decent walking distance of the tube and the bedrooms are reasonably equal it should rent well wit young professionals if you needed to let it.

Go for a two bed house.

If you can always get a 2 bed. They are much easier to sell

Thanks for all the suggestions!
The cottages look lovely, but I'm scared to live in a cottage. It may be completely irrational, but it somehow feels unsafe to be on the ground floor and I'm not really the gardening type anyway.

I will have to give it a few months anyway, and then I hope that flat prices will be more stable - but I guess the advice to go for a 2 bed seems to be uniform, thanks!

@Lightsabre I thought about Hinther Green and the area around, I can't quite undertsand what is wrong with it that's making it so cheap compared to the places around? It seems perfectly nice, yet e.g. flats here: www.rightmove.co.uk/property-for-sale/property-83672935.html have been on sale for quite a long time and are so much cheaper than places in not so great parts of East London.

@JoJoSM2 thanks, I just checked Sutton and it is way cheaper... I may go for a trip through London suburbs one day, the truth is I have never been there . I considered buying properly outside London in one of the towns nearby, but this hardly makes sense because of commute costs.

You could ring and ask about the Hither Green place but it looks like there might be cladding on the block. It’s a bit of an issue as such buildings now require a safety certificate. Sometimes flats in blocks are cheaper due to issues with the management company/freeholder or big repairs coming up but this particular block looks v new.

If you can get a 2-bed without a ridiculous mortgage, then I’d go with that. However, a cheaper one bed would give you the ability to pay down the mortgage. They also rent well to couples or singles who don’t want to share.

Yes, blocks are tricky at the moment due to the cladding, fire safety and the certification that's making them difficult to get mortgages on. That flat is not on the right side of the tracks either - it's still an ok area but it's the Catford side - the other side of HG is more desirable. HG has a lot of flats hence the prices have to be competitive.

I'd go for a two bedrooms if you can. But I'd hang on for a few months as prices are meant to be coming down. I'd also go for an older property as the ones that are difficult to shift seem to be in these new blocks.

Interesting that you'd feel safe on GF in a flat but not in a house - I can see your point if it was detached but terraced ones feel very much like flats in terms of security (and you can choose good doors/locks).
I'm a bit obsessed with security myself, and I agree that a semi-detached (where I am now) feels a bit exposed if it has a side access but imo so are the GF flats.

I lived in a GF flat and found that spooky. I think it’s because the windows were at the front of the building so sometimes I’d get woken up by people walking 2m from my bed in the morning. I never for weirded out in house as I always had my bedroom upstairs + front garden so it always felt less exposed.

Have NC for this. I'm currently selling my flat in Hither Green. It is a 2 bed - one double and one single. No garden. It's within your budget. PM me if you'd like the link.

Hither Green is a great area. You should come and look round. We love it here - only moving because we need more space.

That flat on St Mildred's road is cheap and reduced because it's on the south circular. And the flats in that block are not selling because of the cladding issue and also because the service charge is high.

Mine is a Victorian conversion. If you're interested in seeing it, I'll PM you the link. We are chain free.