Moving up the property ladder London but how?

[hopinghop]

After being on the market for ages finally got an offer on our flat - great. But in reality, we just havent made enough equity to move to a bigger place especially by the time we costed the move and everything. I just feel like if we got on the property market circa 2016 it's all doom and gloom especially for those who cant just move out of London. We now have one DC so in theory could get a small two-bed house and hope that goes up in value and then move again for a bigger place later on.

Sorry, this is just a moan really. We were so happy to have bought our first place a few years ago but just feel like we've totally done the wrong thing and are completely clueless as to how to proceed. Plus I have totally mummy guilt. Not sure if we should borrow as much as possible and get the biggest house we can find, or finding something more affordable and hope to move later. How on earth is everyone else doing it?

Not sure if we should borrow as much as possible and get the biggest house we can find, or finding something more affordable and hope to move later. How on earth is everyone else doing it?

I’m a bit puzzled. Why did you put your flat on the market without a plan? When you decided to sell you presumably knew how much the next rung up would be? If you’ve got a DC now are you moving for schools etc?

If your jobs are secure then borrowing as much as you can to minimise the amount of times you need to move is a good plan - as you point out it takes a lot of the profit away.

When I was pregnant on a one-bed in London we moved to a cheaper area, rented a family sized house and let out our flat instead of selling it. We did that for 7 years before eventually selling it when we moved out of London. It kept us on the property ladder but we weren’t cramped. It’s not hassle-free, you have tenants to deal with, but we could never afford to ‘move up’ in an area that we’d have been happy to live in. So not selling is an option too.

honestly, it took us two years to get our flat under offer (and we didn't quite get as much for it as we'd hoped for) plus the market for houses in the areas we were hoping to move was really hot this year and it just feels out of reach now. so our original plans have been a bit scuppered really.

Sorry I'm confused, if you've been priced out of houses in the area where you want to buy, why did you keep your flat on the market and what are you going to do now? Are you going to go back to renting?

We sold a flat and bought a 3 bed semi ex local authority 2 zones further out for basically the same money. Great area, great schools. Developed that house, made a bit and moved to a larger period semi half a zone further out for not much more. So it’s a matter of swapping up by changing location. Unless you inherit or earn a lot more than before it’s unlikely you can move up in London in the same area. Good luck.

As a Londoner owner myself I would say we have become unrealistically greedy.
Prices boomed between 2012-2016, they haven’t plummeted but growth has slowed. The idea that you would have made huge money in a little over 4 yrs is unrealistic.

If you can't afford a bigger house where you live, you move to a cheaper area or accept living in a smaller property in your preferred area.

You don't have live in a house. People raise children in flats all the time.

And yes otherwise options are inheritance, gift from parents, earning more money or starting a lucrative life of crime

We sold a flat and bought a tiny two bed house that was a wreck. We worked weekends and evenings doing up the whole thing and then when we had paid off enough of the mortgage (like 3 years) we drew out the money again in a home improvement loan and added a loft extension to make it two bed two bathrooms. We’ve just sold that and bought a bigger place (double square foot) that’s not in catchment (kids now in school) so it was the same price that we sold the smaller place for. We’ve worked hard doing up places for the last 6 years and had almost no money but we’re finally in the family home that feels perfect for us. The location isn’t ideal but it’s only 20 min walk from our old haunts.

i guess it just feels like the differential between flats and houses has got even bigger this year. The flst is too small for us and honestly seeing as it has taken us this long to even get it under offer, we are justbhappy to seel it and then go into rentals and find something that works.hende the question. it was just a moan really that getting from one rung of the ladder onto the next seens to have become even harder. Am also torn between being financially cautious or just taking out lots. On the one hand we've got a pandemic on but on the other the London housing market for houses is booming -seems a bit mad ao I keep doubting myself as to what we should do next.

Surely just move outwards to the best your budget will allow. Sounds simple but that’s about the size of it if you want more space.

We moved from Nunhead se15 out to Kenley in Croydon. It was definitely a step down in terms of area and there was the commute, but we could afford a small house at least.

and was interesting in hearing what other people have done if they bought theirfirst place in 2016 and after

I think a lot of people move out of London. We bought our first place (zone 5, 3 bed terrace) in 2015 but once we’d had a second child and needed more space, we quickly realised we wouldn’t be able to stay in London - the jump up to a 4 bed was at least £200k and that was in a not-very-nice part of south east London. Our friends with kids have all done the same (unless they’re massively wealthy!)

I think it depends which part of London you live in. When DS was born we lived in a 1 bedroom flat in North London and moved to a cheaper area in South London to buy a house (and quite a hefty mortgage at the time) it's paid off now though as more space and really love it.

*£200k extra, to clarify!

Some people I know with this problem are using savings or remortgaging to buy BTLs and then leveraging BTL income against a bigger mortgage. Its only 20 years so its a bit like endownment mortgage so it has its own risks. You have to make the right call and get the right properties, and service the investments by either doing them up and selling them residential at the end or selling them on as BTL and then buying another one to replace so you can cover a full mortgage.

Isn't it die to people wanting a garden, so demand for flats has stagnated whilst demand for houses as soared? Maybe hang on for a while in rented, when the (artificial) race created by the stamp duty holiday has died down, plus (hopefully) we're out of lockdown, prices for houses might stabilise.

But it's the same dilemma everyone has - more space without a big jump in price (which usually means moving to a less desirable area) or same location without much of an increase in space.

@Africa2go I think you are right, but I kind of feel like we should have made better choices last time we bought so feeling very nervous about making the same mistake again but this time it's not just the two of us but also DC.

We are happy to move areas to get more space but am just not sure whether, for example, we should get a small house with a manageable mortgage for a few years or a house with a much much larger mortgage that could end up being our forever home.

What's your budget and what areas are you looking in?
These days, if you're young, it's best to stretch and buy a two bed house as soon as possible. Look for one with potential to go into the loft or extend downstairs. As others have said look further out. There are some cheap but nice areas close enough to chi chi places. For eg, Plumstead Common is a short journey to Blackheath, Greenwich, the river etc and I'm sure there are examples like this all over London.

Miriam Road, Plumstead
www.rightmove.co.uk/property-for-sale/property-88149442.html

This one is sold but lots of houses like this for example in Plumstead Common.
If you want to stay in London and buy a house then generally SE London is the cheapest area and nicer imo than any of the other 'cheap' areas of London.

@Lightsabre

Miriam Road, Plumstead www.rightmove.co.uk/property-for-sale/property-88149442.html

This one is sold but lots of houses like this for example in Plumstead Common.
If you want to stay in London and buy a house then generally SE London is the cheapest area and nicer imo than any of the other 'cheap' areas of London.

This is a nice house! What's plumstead like?

I don't think you get the above property in Plumstead common for that price.
Am I be wrong!

I like that Plumstead house and didn't realise how cheap the area is! A bit confused by the agents describing the house as "dashing"

Sorry OP not much help. I feel your pain though and wish you luck.

[quote hopinghop]@Africa2go I think you are right, but I kind of feel like we should have made better choices last time we bought so feeling very nervous about making the same mistake again but this time it's not just the two of us but also DC.

We are happy to move areas to get more space but am just not sure whether, for example, we should get a small house with a manageable mortgage for a few years or a house with a much much larger mortgage that could end up being our forever home.[/quote]
On reading thread properly rather than just posting about Plumstead (which I don't know at all) here's my advice:
Buy a smaller house rather than stretching for "forever house". I'm 57 now with grown up children (we left London in late 90s as priced out - it was the same even then).
You don't t want to overstretch now. The smaller house will still increase in value if you can stay there for at least 5 years I would say. By which time hopefully you will have a higher income coming in, and then think about "forever home" (if there is such a thing. I don't want to stay anywhere forever). You will also by then know more about how many kids you are having etc etc. During that time also gradually improve the little house if you can and look after it, it might pay dividends.

Moving house is always expensive but an extra move before buying forever home can give you the means to make that bigger move later. If we had stayed in our first place and waited and then aimed to move to the big house we are now in, well it wouldn't have happened. A couple of smaller moves in between enabled us to get to our current "forever home" (big house, been here 15 years but now downsizing so it was hardly forever in the end). Disclaimer: times were different for us and we had luck.

If you’re going into rented then you’re in a good position to not rush a decision. If you’ve got a baby now (how old?) you’ll be surprised how quickly school application time comes around. Depending on when your DC’s birthday is you can be applying when they’re 3.... At that point, if you’ve bought in the wrong place you do regret it - so at this stage in life I’d say it’s location rather than property itself that is most important. Then it’s really only 6 years max before secondary schools application- and that might also trigger a move. So the ‘forever house’ in London is probably a bit of a false hope? As others have said, look for houses with potential to extend/go into loft/put an office in garden so you have wiggle room if needed.

@Cloudesley - I posted the Plumstead house as an example of how you can find nice houses in cheaper areas of London that are near 'naicer' areas. That is the way to move up the property ladder. This house for eg, could be extended into the loft to add space and value. It will also be handy for Crossrail when it opens - another way value will be added.

@xtrachattypatty - Plumstead is nicer round the Commons with dozens of roads of Victorian houses around the £320-400K range. It's (one of the last) up and coming areas of London. I prefer it to other comparable areas such as East Ham for eg. Transport links are good and getting better. Schools are good on the whole and the catchment for the Bexley Grammars extends to Plumstead.

thank you, everyone. will have a think about everyone's suggestions and might check out Plumstead. Now trying to figure out a rental before firming up our next steps.