Nice areas in London for £700k

[Mandofan]

My partner and I are looking to buy at the end of the year so I’ve been looking on rightmove to see what we can get for our money. We currently own a flat in north London and I would love to stay in the area. Our budget is £700k but I can’t find any houses in the areas I truly love. One non negotiable is it has to be on the underground and no more than half a mile from the station. Everything I’ve found is almost a mile from the station or isn’t on the underground. We’d ideally like a 4 bed but would go for a three bed and extend if possible. Currently looking at Finsbury Park and near Highbury but not had any luck. Are we being unrealistic? I’ve seen a few nice ones in Turnpike Lane and Colindale but I don’t love the areas. Any ideas on where we should look? No DC yet but would like to be in an area with good schools. I’m worried we won’t find anything or will have to compromise massively

You've lost me. Your future children would benefit from living in a family home and location that better meets your needs, and they will eventually inherit your house or you can sell it and downsize, freeing up equity to pass to them. You can also save separately in investment ISAs etc for their future, benefitting from compounding returns. I don't think it's simply a question of whether morally you're for or against buy to let / second homes.

I'm speaking as somebody who pushed the budget in London to buy their family home, which I'm now hugely benefiting from.

Additionally, it seems to me from Rightmove trawling that the more expensive (say £900 - £1.2m), well located family houses generally increase in price more than smaller, cheaper houses as there are usually fewer of them.

Erm you don’t have any kids…

Also factor is stamp duty. I was in the same situation and we were very on the fence.
when we ran the numbers it was better to just get up the ladder in as few moves as possible. Also when you sell residential there is no capital gains… our stamp duty was £50k (ouch!) I am not keen to move again any time soon.

By selling our flat we upped budget from 700k to a 1-1.3m budget and have a “forever home” ( hate the phrase too) it’s a 5 proper bed house big garden near good schools / hospital / high street and 5 min walk to station.

I have was on the fence about this as liked BTL to but have ZERO regrets.

We are coming up to 3 years in this house and just sorting out our first btl… I am happy we did it this way round

SE London (parts of it anyway) have brilliant transport links but we are most definitely not North London.

I appreciate it might seem silly to be thinking that far ahead but i like to look at the big picture. We could sell both flats but I’ve heard so many stories of people selling London properties to buy elsewhere and then finding it very difficult to invest in a property in London later. I appreciate this is a first world problem im just worried about making the wrong decision. I guess we’ll have to sell both and then look at getting a buy to let outside of London. I also don’t think there’s anything wrong with ruling out certain tube lines. I lived on the district line for years and it’s slow and always seems to have some sort of engineering works. I also Found the metropolitan line slow plus I don’t want to go that far north. Buying a house is a big commitment so in anxious of getting it wrong. I don’t have any experience with this as DP just added me to his mortgage but I suppose I’ll have to be more open to what he’s saying as he’s experienced buying property before and knows more about the pitfalls

The update on potentially having access to a bigger budget changes the options somewhat. That budget would definitely get you closer to what you want in terms of the forever home option, but it comes at the price of losing the investment property. Re the tube lines discussion, yes it is fine to rule out certain lines but it makes it very hard if you are also insisting on being close to the tube. I would seriously consider overground options. I live in SW London and trains to Waterloo are every 3 mins in the rush hour from my local station.

@Mandofan

I realise selling our current flat would increase our budget i’m just really reluctant to do it. I’d rather rent it out and then sell in a few years to buy an investment property in a slightly nicer area. I know but to let properties are a touchy subject on here but I’d love to keep it in the family so we have something to leave to our kids

You know that you have to pay income tax on rental income and that btl mortgages are based on rental income not salary. Plus need 25 per cent equity And 2nd home stamp duty

That’s a lot of extra cash to need

Plus there is no logical reason why you went on his property and unless you are planning some fiddle it may end up costing you more

@Mandofan appreciate there's a lot to think about. If you sold both flats, what budget would that give you roughly for buying a house?

Personally I'm still not convinced that rental properties are the best investment bet, given the changes to taxation in recent years. I've opted to put lots extra into my pension (40% tax relief on money going in) and pay into my stocks & shares ISA, which I manage myself. But appreciate others will take a different approach / view.

[quote Rosemarypots]@Mandofan appreciate there's a lot to think about. If you sold both flats, what budget would that give you roughly for buying a house?

Personally I'm still not convinced that rental properties are the best investment bet, given the changes to taxation in recent years. I've opted to put lots extra into my pension (40% tax relief on money going in) and pay into my stocks & shares ISA, which I manage myself. But appreciate others will take a different approach / view. [/quote]
Capital gains when you sell as well
And if you become highest rate taxpayers when you have Btl it can be harder to remortgage it as well

@Rosemarypots I’ve just calculated it and if we delay buying until next year then the increased capital in both flats plus savings and what we could borrow means we could potentially go up to £800k. DP is due for a raise soon and we’re hoping his salary will go up to between £65 and £70k which means we could potentially borrow more. Seeing it written down makes me realise I’d be ridiculous to be hellbent on keeping one of the flats as an investment at this point in time. We could always buy one in a few years outside of London as this is what our parent have done

What's your commute? Push yourself as much as you can before you have kids because the bank will factor all that in

@thebigpurpleone we don’t have a commute at the moment as we both work from home. I’ll be wfh for the foreseeable and DP will have to go in one day a week from next year

I think you're being a bit unrealistic, and also what is the point of buying a 4 bed house at this point... you are young and you don't have kids yet. Buy a 2/3 bed place that you can afford and then get something bigger when/ if you need it.

@cookiemonster2468 After reading the comments on this thread and discussing it with DP Ive realised its better to move less due to upheaval and stamp duty costs. We wants two kids and my mum will eventually come to live with us so we’ll need a 4 bed

@Lotsofpots

Look at Walthamstow, nearer Blackhorse Road than Walthamstow Central, as it's cheaper. Leyton also meets all your criteria and though prices have gone up, you're likely to still get a 3 bed in budget if you're prepared to do some work to it. It's on a tube but also is walkable to Stratford so loads of transport options open up.

Was going to suggest Blackhorse Road too.

Sorry for the cold shower but 700k in Islington for a family house? Come back when you have 1.5m, at least. With your BTL, and the associated 3% stamp duty surcharge you re looking at 140k of stamp duty for that house if you want to keep your flat. Also, factor in higher interest rate for both your BTL and your house not just the upside of rent increase and capital gain. Even extending to north London, all nice areas with good schools will require at least 1.2m (Woodside park, Totteridge and Wetstone, Muswell hill, even High Barnet). Would agree we most here, sell all your flats (makes no difference to how much you ll pass to your unborn kids, or more likely grand kids given the life expectancy), look further a field or “not nice” part of better areas (e.g certain part off Holloway road, Tottenham, North Finchley, etc) and pray for the interest rate to remain low for a while.

Some of the advice on this thread is around five years out of date.

Wanstead or Colliers Wood.

[quote Mandofan]@cookiemonster2468 After reading the comments on this thread and discussing it with DP Ive realised its better to move less due to upheaval and stamp duty costs. We wants two kids and my mum will eventually come to live with us so we’ll need a 4 bed[/quote]
This is true. We bought a four bed before having kids

@cookiemonster2468

I think you're being a bit unrealistic, and also what is the point of buying a 4 bed house at this point... you are young and you don't have kids yet. Buy a 2/3 bed place that you can afford and then get something bigger when/ if you need it.

OP. Probably won't be able to afford it though. She does right to buy a 3 bed soon. Imagine OP in a 1 bed and she falls pregnant!

@Icantgetalifeifmyheartsnotinit

Wanstead or Colliers Wood.

You aren't getting a four bed in Wanstead for 700k!!

This thread is bananas.

Why on earth would you prioritise a BTL for children (that you don’t even have yet) to inherit in 70 years time, over living in a house/area you actually like? Especially if it’s intended to be a long term house and comes with a £21,000 stamp duty surcharge?!?

Divorce rates are around 50% (and I would guess you’re not even married?!). Statistically, you’re more likely to be selling the house in 10 years time to fund a separation than to be moving your mother in.

Sounds like you need to have a serious discussion with your boyfriend about your priorities. Otherwise your 4 bed house near the tube is only ever going to remain a daydream.

What is your budget, once you sell the second flat (and recalculate the SDLT)? Leytonstone might be within reach. A 3 bed Victorian terrace with a big garden would be a sensible bet - one of the 5m wide types with a decent size (6x3m+) outrigger. Gives you scope to extend up and out to make a decent size 5 bed family home, in due course.

@Mandofan

I realise selling our current flat would increase our budget i’m just really reluctant to do it. I’d rather rent it out and then sell in a few years to buy an investment property in a slightly nicer area. I know but to let properties are a touchy subject on here but I’d love to keep it in the family so we have something to leave to our kids

My advice (after 30 years with BTLs) is that both scenarios have their pros and cons - but don't, whatever you do, base your decision on leaving things to children you don't even have. Even if you did have children, and even if those children were to turn into nice, responsible adults to whom you would be happy to leave hundreds of thousands of pounds of property (leaving aside IHT etc), you may find there are other, more pressing calls, on your money before you die!

I think that if I were you and couldn't afford what I wanted, where I wanted it, I would sell both and buy something in which you could bring up any potential children.

In practice, I'd probably TTC first, then move at the point at which it became really pressing, as there will be more on the market then.

So our budget if we sell both is £800k. Maybe a little more if our parents help out with stamp duty. I’ve realised it’s silly to keep our current flat as an inheritance as we can invest in property later and leave that to kids. I’ve had a look and Walthamstow looks like the best option right now. Colindale is looking promising too. We’re in a one bed right now and we really need more space. Planning to get engaged this year and hopefully married next year and ttc shortly after if everything goes to plan. The market is crazy right now and I’m finding it really stressful as I’m a planner and im convinced we’ll never find anything

Good call. I'm the opposite of a planner, and everything has worked out ok, so I am sure it will do for you too!