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Original poster

Best way to get on housing ladder

50 replies

MmeSosostris · 28/01/2022 20:30

Or rather, best way to get a home🙂 I am trying to work out what is best for my budget (very modest) in London.

A) get studio within budget in ok area and pay off as much as possible, aim to move in 2 years to flat and just keep repeating this until have something substantial I can stay in for ever.

B) buy a place in zone 4/5 that needs some work doing and look to add value by doing the difficult stuff and then sell hopefully at a profit. Again, rinse and repeat

C) go for better paid job than currently on (possible) and buy as much as I can afford in decent area and stay there

D) as c) but in cheaper area and hope to make profit to move to next area with better deposit.

Any ideas?

OP posts:
LittleRedYoshi · 28/01/2022 20:39

Scrap any plans that involve moving repeatedly. The cost of moving house can be in the 10,000s by the time you add up stamp duty, estate agent fees, solicitor fees, etc - you want to try and make as few moves as possible.

Ideally you want a combination of B and C - maximise your budget, buy the best you can afford, but something you can add value to, stay there until you have a good reason to move on and swallow the costs, and buy something where you can stay put as long as possible.

Original poster
MmeSosostris · 28/01/2022 21:32

@LittleRedYoshi. thanks, Yoshi. I’m sick of renting in cheaper parts of London and feeling like everything is happening somewhere else and that I’m not getting the benefit of nicer areas. There are some cheap studios (100,000) coming up but I saw a 3 bed in Plumstead, (150,000) freehold, needs some work (kitchen, bathroom) but not so bad for one person to do. Although these are auction so who knows what they go for.

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User65412 · 28/01/2022 21:46

B! We bought a 107 house and sold it for 250 after doing kitchen and bathroom 4 years later. I couldn't believe it. Don't max out on your mortgage as you'll need the cash to pay for the work obviously. DIY what you can.

winterowl · 28/01/2022 21:59

I don't think you'll get a three bed place in Plumstead for £150k. Rightmove shows shared ownership for £112k, or auction properties from £225k - with completion needed within 6 weeks which is near impossible with a mortgage and as an FTB.

earsup · 28/01/2022 22:10

B or C....i wouldnt buy a studio flat....our area is flooded with unsold flats.....yet council has approved even more high rise blocks....

caddyshackGirl · 28/01/2022 22:18

Remember the saying buy the worst house on the best street, so you add that value

Embracelife · 28/01/2022 22:55

Don't get a studio unless it s fantastic location close to great amenities

Original poster
MmeSosostris · 28/01/2022 23:20

Thanks everyone. I always remember my dad saying never buy a studio, you can never sell them on but considering the times we are in.

That’s my error @winterowl Ishould have written £225. I think that Plumsted house has a lot of potential. I meant something similar with the same scope for improvement but underpriced as it’s a dirty job.

Am trying to work out whether to stay in non stressful job that gives me time and energy after work to take on a project or go for better paid job that will take up more head space and energy and leave me less time for a project outside of work. I say project but considering I’m renting it’s a mission!

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Paulina23 · 28/01/2022 23:24

There is no ladder, this concept was to reflect the incredible capital gain experienced by the entire London since the 90 where values have multiplied 10x in 25 years. There is no secret sauce, special housing type or location, it is a generational phenomena that was mostly driven by 40 years cycle of downward interest
rate, pushing value of any assets up as a result of lowering cost of borrowing. Without capital gain on your asset, the whole concept of equity paper to back up more debt and so on falls flat. You can either try to earn considerably more, or hope for a brutal and prolonged interests rate rise from the BoE.

Totalwasteofpaper · 28/01/2022 23:36

My personal strategy was combo B&C…

  • My salary was going to go up so I got the biggest mortgage I could on the place that needed decorating but was overall was structurally fine.
  • aim for as few moves as possible (stamp duty is THE most painful thing)
  • related to the above really think about location and transport links (I did a 1h 20 commute from zone 3 for 18 months and it was the pits)
  • do not get a studio. I got a spacious 2 bed (1100sq ft) and had lodgers for 6.5 years. That earned me 51k tax free which was used to overpay my mortgage / invested in ISAs after 7 years I had paid down almost £200k on my mortgage Shock
  • the 2 bed was a dump. No internal doors, destroyed kitchen, bathroom from 1980s. I spend £15k getting a new kitchen and bathroom in and to keep costs down did day labourer work myself. alongside this I spent every evening (and often 30mins before work) stripping wallpaper, prepping and sanding, painting, finding and collecting free cycle furniture etc. I also didn’t go on holiday for 2 years.
Original poster
MmeSosostris · 28/01/2022 23:49

@Totalwasteofpaper. That’s what I had in mind - do what I can and leave money for the structural/electrical/plumbing to be done by professionals. Try and make sure structural issues are minimal, mostly cosmetic, near a station, with either a garden (ground floor) or attic (extension) to add value. Atm I am paying £759 a month for a studio so with bills on top, it’s crazy money.

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Original poster
MmeSosostris · 28/01/2022 23:52

@Paulina23 thank you. I agree the ladder is a myth.

Why do you say I should wish for interest rates to go up? What effect will that have on the market do you think?

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Totalwasteofpaper · 28/01/2022 23:54

It worked VERY well for me…I had a 1st floor with no garden or attic (not my pref at all…!! but very popular seemingly) but it was period and the market gave me more than a helping hand.

In the current market I’d be very careful on the professional building work. Costs are sky high right now and continuing to go up…

MrsMoastyToasty · 28/01/2022 23:55

E. Buy a property in a cheaper town. Get tenants in for a couple of years which will pay the mortgage. Sell property. Buy next property where you want to live.

Original poster
MmeSosostris · 29/01/2022 00:00

@MrsMoastyToasty

Yes, thought of that. Looked at Cardiff. Not sure what other areas as Manchester seems to be very pricy and I thought it was full of places to rent. I still have to live in London and rent but I would think about it. Figured London was best bet but perhaps that ship has sailed.

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Original poster
MmeSosostris · 29/01/2022 00:02

@Totalwasteofpaper yes, ideally I’d get somewhere that just needed modernising/updating and I could do some of that myself.

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TedMullins · 29/01/2022 00:03

What is your budget? I’ve recently bought a 1 bed in zone 4 but an area with good transport links. I had a low budget for London and £0 budget for renovations. I wouldn’t look at studios personally - I’d go for something further out but ready to live in that would work for you for the next 5-10 years so over that time you can hopefully save more or increase your salary. If you can stretch to a 2 bed you could get a lodger.

Original poster
MmeSosostris · 29/01/2022 00:11

Hi @TedMullins

I’m trying to decide whether to take £25,000 a year job that would get me max £120,000 mortgage or £40,000 job that would get me £180,000 to £200,000 mortgage.

On lower salary, I could do more work in my spare time, less expenses, not in central London. Higher wage gets a better job but I wouldn’t have the headspace to do a ‘project’ as such. That’s the way I am currently viewing things but perhaps I am looking at it wrong 😮🤣

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caringcarer · 29/01/2022 00:39

Don't buy studio. Buy a doer upper further out with good train links in to city. Do it up bit by bit. Wait at least 5 years before you sell and you will have likely built some equity.

Original poster
MmeSosostris · 29/01/2022 00:51

@caringcarer. Would you go as far out as Dartdord/Welling?

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LemonSwan · 29/01/2022 00:54

We did B and D -

Moved from London to the midlands, so went with the lower salary/ lower costs strategy.

We did biggest/ best 'bones' house we could in worst condition possible - in a middling area. So that was a 3 bed semi 'worst condition house on a middling street'

Did it up and sold for a good profit 4 years later.

We have now decided to go for 'best house on a slightly worst street'. Its just round the corner from our old house so nothing dramatic, but its near a busier junction, and has less of an appealing street scene. Thats because we plan to stay here for 10 years or so. This home we are doing up to be ours rather than resell. Its big enough for a family and we are home bodies most of the time. Space is whats important to us.

I think ultimately you need to decide whats important to you. The money aspect is important to some extent but this is your home. You need to be happy there, it needs to fulfil your needs, accommodate the life you want to live etc.

TedMullins · 29/01/2022 00:56

Have you got a large deposit? Even in the cheapest areas like Thamesmead (which I really wouldn’t recommend as the transport links are almost non existent) plumstead or out towards eltham and mottingham I’ve never seen anything for 120k. I got a one bed for 205k. Personally I would take the higher paying job and get a better place, do you want the commitment of having ‘a project’? I had a small deposit so my mortgage is £800 a month, it’s actually not cheaper than renting! Bear in mind if you went for the super cheap place you could still have high monthly mortgage payments if your deposit is small.

Original poster
MmeSosostris · 29/01/2022 01:01

@LemonSwan

I can’t afford the life I want to lead or the life I had planned for! I’m a Londoner but due to a disability that developed late and has taken the last twenty years to get on top of, I am now in the situation where my friends have really moved on and are settled in places I can’t afford - same with family. I think London is best for me now as work is secure here (usually).

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Original poster
MmeSosostris · 29/01/2022 01:02

@Ted the thought of those places makes my heart sink. Even in zone 3 the places I can afford are not exactly inspiring.

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LemonSwan · 29/01/2022 01:11

I can’t afford the life I want to lead or the life I had planned for!

I can sympathise to the extent in that I am sure most cant afford the life they truly wish to lead Grin - I say partly in jest, partly in not. I would love a georgian manor house on an acreage. I hope you know what I mean and dont take offence!

Really I mean more broadly - ie. do you wish to have a dog and that wouldnt work in a studio; or want a cat and wish for an outdoor access. Do you wish to be near a particular niche hobby - like for example I like Bikram Yoga and the nearest to me is a 45 minute drive and something I dont do anymore. And is having a bigger house more important than Bikram.

What are the smaller meaningful components of your life and wishes for the future IYSWIM. And where can you live which gives you the best balance.