Hi All,
So me (27F) and my boyfriend (32M) are looking to buy our first property. We've been looking since January but the market is absolutely crazy at the moment and we have also struggled to decide where we want to live.
We are currently renting in zone 3 London and we pay £950 per month each including bills, so £1900 together (rent is £1650 p/m and then we pay £125 each for bills). For reference, I earn £35k and my bf earns £50k (before tax). We have been saving for years and years and have managed to save £95k. Our mortgage advisor has told us that our top budget is £500k (I'd rather not stretch ourselves this much tbh)
We have 2 options:
Option 1: Buy a house outside of London (Surrey, Sussex, Kent areas) (although there are not many houses in these areas atm) we would have to lower our top budget to around £400-£425k due to having to pay high commute costs (£300-£400 per month each). We could probably get a 3 bed semi-detached house (with one of the rooms being a box room), but, as I say, we would be spending around £300-£400 on commuting each plus door to door it would probably be 1.5 hours commute each way! (bf can work from home a couple days a week, I can't work from home at all, although I am open to getting a new job, but chances are it would still be in London)
Option 2: Buy a flat in London. Staying in London would mean that we could stretch our top budget a bit more as we wouldn't be paying the high commute costs, however, we have found a 2 bed garden flat with a separate kitchen and separate lounge in zone 3 London (where we currently live so we know we like the area), for £425k, however, the flat needs work (re-plastering, decorating, new floors, new bathroom, new kitchen). As I said, the flat is up for £425k which is very good for the area, I reckon we could get it for around £415k, we would pay a 15% deposit which is around £60k, pay fees etc (£10k?) and would then be left with around £20k to do it up, also, because we are in London, we could use our help to buy isa's so would get around £6k from the government, which could pay for the new bathroom. (we wouldn't be able to use the help to buy isa outside of London as the threshold for it outside is I think £250k). Looking at the street, a flat opposite that is exactly the same as this one, but done to a very high standard, with a smaller garden that backs onto a railway track, has just sold for £500k, other similar flats further up the street have sold for £550k, this makes me think that spending some money on doing the flat up could make us some serious gains, plus the area is a growing area.
For info, in the next 5 years, in an ideal world, we would get married and have a kid, in the next 10 years, I would like to have at least 2 kids (maybe 3 if we could afford it)
Pros of option 1: we would have more space and live in a house that we could grow into, any house we buy would probably need a bit of work (as most places do), I think that if we bought a house, we would be able to stay there for 10 years or so.
Cons of option 1: We would have a high commute cost (£300-£400 per month) plus a long and draining commute, we don't have kids atm and probably won't for at least 3 years so for now at least, this would seem pointless. We wouldn't be able to use our help to buy isas so we would lose out on that £6k from govt
Pros of option 2: We wouldn't have the high commute cost (i pay £100 a month currently and bf pays £0 as he cycles), commute times would also just stay the same as current (40 mins for me and 30 mins for bf). I also think we could make a lot more equity with this option. We also know that we like the area and it is also a growing area. The mortgage would probably be around £1300 per month so quite a bit cheaper than what we pay currently, and with commute costs the same, we would be better off each month.
Cons of option 2: We would have less space, its a flat with 5 rooms including the bathroom, but as its a 2 bed we could have a child there.. my main worry with option 2, is that in my head, we would stay there for 5 years and then move out of London into a house, I worry about not being able to afford to move when the time comes, as I know moving is expensive.. is it more sensible to pick the option where we won't have to move for many more years, or would the equity we could make help with moving? (I don't really understand how the property ladder works tbh)
Any advice welcome! thank you!