Advice wanted - buying in London

[Nolongerteaching]

MN seem knowledgeable so I’d like to pick your brains if I may🙂

i’m thinking of buying (low end of market, a London studio/flat, zone 3/4, circa £120-150

This is all I can afford and I will have a 5% deposit. I’d like to take advantage of Sunak’s government mortgage scheme that runs out this December. It guarantees 20% towards your deposit so you get favourable LTV rates.

To me, all this talk of interest rates rising/houses going down in value has to be balanced by what I can achieve. I currently rent at £810 a month ex bills.

I think it is better to try and buy before this scheme runs out to try and lock in a really good 5/10 year rate then wait for them to go down more and lose the chance to use the scheme.

Am I making sense or just panicking? What are your thoughts? Thank you and all advice appreciated

Your thoughts sound good but will you find anything apart from shared ownership for that budget? The London market hasn't cooled yet and property is often going for sums far in excess of asking prices. You need to get your ducks in a row so you're as procedable as possible. I'm expecting mortgage interest rates to shoot up over the next 5yrs at least. It's been historically low for too long now. Good areas don't go down in value, they just freeze & sit it out in my experience. I'm going to google now & see what you can get for that budget.

A garage for conversion, an auction ex local authority towerblock flat, or one shared ownership flat for 25% share were all I could find. Have you thought about pooling resources and buying with a friend? Any wealthy grannies you could squeeze for an early inheritance?

With that budget I think you need to move out of London, maybe a flat in one of the commuter towns?

Thank you all for reading and replying.

Yes, it’s ambitious and I may well have to go further out - Woolworths, Plumstead, Orpington. I know the SE very well as I grew up here.
My thoughts are that I have to do something now as I am 50 (!) and if I leave it too much longer am worried that max term I could get would be 15/20 years at too high a monthly repayment. Using an affordability calculator, there are several 5 year offers at between 4.06-4.34 %. That’s is with the 20% govt underwriting scheme.

The alternative is wait 4 and 1/2 years and try for an over 55s. I have looked at other locations but would like to be commuting distance to central London.

I never thought this is what I would be considering but here we are and I have to make the most of it. My reservations regarding shared ownership are down to lease/management issues - I have heard bad things and think perhaps I just need to bite the bullet and get somewhere less complicated (even something that needs cosmetic interior work done and live in it completing bits and pieces along the way.

No, no wealthy relatives (that I know of!)

Or loaded partner. Or partner actually. So, I am tempted to head off to Berlin or somewhere cheaper but I have some health problems now, am slowing down and need some security after years of living in an eclectic mix of places with all the stresses and experiences that brings.

Have considered auction properties and watch a postcode and 5 mile radius to get a sense of what’s out there and where it is going price wise. Think some low end stuff that needs work is coming down in price and it could be just what I need to get in and on. There are bridging loans for auctions, my bank has said they will provide a mortgage for an auction property but there are a lot of risks re valuations, etc to consider.

I’m tempted to buy a big field in Kent and put a modular kit home in. Rewild the whole place. That’s me down to the ground and the new self build mortgages interest me. But then I think I should play safe so if I can find a studio/flat near a Trainline/tube I would go for it.

You can by the way do shared ownership at over 55 -

We did shared ownership and all was fine- we even sold our share easily. I would go for that rather than one of the over55 developments if you got to 55 and still hadn't bought) we are 60 by the way. Reason being that flats or houses in over55 developments are often hard to sell (whether shared ownership or not ) due to a restricted market

Hi OP. I live in Chislehurst, and respectfully, you're on cloud cuckoo land if you think you're finding anything in Orpington or surrounding areas for £120-150k! You've not got a hope in hell of finding anywhere even remotely close to SE London in that budget, unless you're looking at shared ownership in which case yes potentially, but I can see you're not keen on that. Before you start looking at interest rates etc I'd speak to a mortgage advisor and get an idea of exactly what you can borrow, then look and see what areas you can afford. Because all of your ideas are based on finding a property in an area which I honestly cannot see ever happening.

Unfortunately the property market is savage and I really feel for you being in such a tricky position!

Here's an example of a shared ownership for over-55s in zone 3. Perhaps 40% of a 1-bed would be affordable when one comes up. But I think you might need to have some degree of health issue to qualify:

housingcare.org/housing-care/facility-info-161232-cheviot-gardens-west-norwood-england

www.rightmove.co.uk/properties/124764161#/?channel=RES_BUY

perhaps this kind of thing. Not far from station (10 min walk). Regular trains

That's cash buyers only - probably because the lease is very short.

Most very cheap properties seem to be auction only, which I think limits it to cash buyers only?

Otherwise I was going to say here's one in Erith for £120k:

www.rightmove.co.uk/properties/124350404#/?channel=RES_BUY

That Hither Green flat is cash buyers only OP - probably either a short lease or the conversion doesn't meet building regs

Do you need to be in London for work OP?

If not, would you consider Southend at all? A friend of similar age to you recently bought a lovely one bed flat there for £145k. She had rented in London for decades but would never have been able to buy here. She is so settled and happy now (she can mostly WFH and it is easy to commute once a week).

Sorry , wrong link - that’s cash buyers only. I’ll try and find the one I was looking at earlier.

@wibblywobblybits

yes further out perhaps but in that direction.

@Crikeyalmighty

that sounds as though it is working out well for you! Perhaps I should take another look. I think my feelings are that I am compromising massively on area anyway as I would much rather be further in to London so paying the extra rent on top of the mortgage just didn’t seem to add up and I can’t see how I would ever pay it all off.

The lease is 62 years on this which is why it's cheap, so it wouldn't be possible to mortgage it.

OP bear in mind the fees associated with auctions, so you will end up paying significantly more than the hammer price.

Definitely look in Woolwich - it's a fantastic place to live!!

Also a short lease. Although if OP has no family she'd want to leave it to 62 years would probably see her out.

OP you may have grown up in those areas, but do you know what they're like now...?

@TurmericFan

that looks great! I wonder how long the lease is? Something like that is what I had in mind.

Erith is on the Trainline into central London and I expected I might have to go far out.

I posted replies to you all and somehow managed to lose the😖😖😖

and now I have to go and check on someone poorly.

will be back soon

thank you all for your advice

It says it's 62 years. So cash buyers only. Do you know what Erith is like?

I live near - ish to Erith, it's not the nicest area.

I wonder also about the following. There's no service charge, but presumably the leaseholder will still need to bill the leaseholders for maintaining the exterior of the property and the garden etc. So how will that work, will there be the risk of potentially large one-off charges from time to time?:

"Ground Rent: £60 per year
Service Charge: £0 per year"

"the freeholder will still need to bill the leaseholders"

Ok, I got lost there for a while but what do MN think of this?

www.rightmove.co.uk/properties/126404972#/?channel=RES_BUY