Where to live - London / SE

[BettyPhuckzer]

Hi all

I hope you can help.

My neice currently rents in Clapham and wants to buy but can't afford Clapham

She's 28 and would have a deposit of around £120,000.00. She earns £35k.

She doesn't want to move too far from her work (Central London), so not as far out as Reading, for example, because most of her friends live in Central London

She'd prefer a freehold property, but is that even possible for her budget?

What areas would you suggest?

Thanks

That flat says "Buy to Let only"

@BettyPhuckzer See my posts. There are one bed flats in the Tooting/Brixton area. Easyish commute to work area and friends if they are still in the Clapham nightlife bubble. Also Shepherds Bush as Central line takes 10 mins to Oxford Circus. I feel 5x salary is pushing it if DD wants a life as well as a mortgage.

Thank you! Yes I agree 5x salary is crazy for my niece to afford

@BettyPhuckzer Im not sure if you know Clapham but it’s Mecca for post uni 20 somethings who want a local social life. Clapham High Road is very lively. Rents are high as it attracts highish earners and it’s very much an extension of uni life. Then DC mature a bit and want a place of their own. Two salaries get a lot more! My DD is in Kennington but that’s quite expensive. Oval and Stockwell are a bit cheaper but there won’t be much. Ex Council is a possibility but that depends on estate I think. She should think about commute to work and ease of meeting friends. They might all be moving to Catford (friends have retired there!) but being isolated from friends might be a step too far. Night tube is valued by many on lower wages.

@TheYear2000 Thats what I think. Streatham and Tooting is a possibility, no doubt.

There are so many options but I think the main issue will be getting to £300k with a relatively low London salary, despite a large deposit

And then possibly / probably having to buy leasehold

And then possibly not being able to live in an area she likes

Maybe she should buy away from London, rent it out and continue to rent in London?

It’s not a good time to be renting out a property, there’s lots in the media about it being a really bad time.

I think your niece will naturally become more realistic as she starts to view properties. She’s in a fortunate position with a budget of 300k compared to many young people. There will be compromises made from her original dream but she can afford to buy a nice property in the south east. Whether that’s a 1 bed leasehold flat in outer London or a 2 bed freehold terrace further out is obviously her choice.

She needs to speak to mortgage broker to check what she can borrow. And freehold isn’t all positive, at least leasehold the freeholder has to sort the repairs. We happily have a council leasehold

Echoing @PinkRoses1245 - leasehold ain't all bad. We have a council freeholder too and honestly it's been fine.
We can call them and speak to them with problems and queries and there is a sense of accountability, unlike with a random absentee freeholder of, say, a converted Victorian building. Not all leaseholds are the same, if you see what I mean

I think for the budget and travel she ought to be looking at Lee, Mottingham, New Eltham or Eltham. All have easy and quick transport to central London and she could find places in budget and are nice places to live 😊

@BettyPhuckzer Dont discount leasehold. However you need extra money for the management company to sort out repairs. Posters still saying £300 k is too high if she wants a life and pay bills. I still think she has options but is she likely to find a partner to buy with? She can invest the deposit and get 5% pa right now.

You might be aware that the government has consistently made it more difficult for landlords. Lots of laws to comply with. She would have to hand all of that to an agent. You still have to do repairs (quickly), pay tax on earnings and do more complex accounts. She would require a buy to let mortgage. It’s not the best way to make money! Never mind getting a tenant out if you need to. It’s your property but you lose control of it.

So I’d talk to a mortgage adviser and see what area she can afford based on work and where friends live. After DD moved to Kennington she’s several friends within 10 minutes walk. They visited her and liked the area. She cannot be too choosy in London but does she really want to live in, say, Aylesbury, where she could buy a tiny 2 bed house and commute? I know what I would do. Have something in London but freehold or leasehold - there’s costs to factor in. Plus life.

I'd let go of the leasehold anxiety. Loads of people have leaseholds and it's fine. Can't expect a freehold as a FTB on a lowish salary in London/commutable areas. If she gets past the leasehold issues, there's lots of nice options here.

Croydon - she can get back to Clapham in ten mins but very affordable in comparison

Around Norwood junction - 12 minutes to London Bridge, and on the overground.

South Norwood can have a bad rep, particularly around Portland road, but it’s undeserved and totally fine. New places keep opening on the high street. Much greener than Catford.

if live on the high street side of Norwood junction, can also get to Selhurst easily and then on a direct Victoria line too

Actually I think in your niece’s shoes I would put the deposit in a high interest savings account (maybe a fixed term bond of 6 months or even a year, these pay higher rates) and see what the market does.

Prices are coming down and are going to come down more once the combination of winter bills and mortgage fixed rates ending kicks in. Plus various extra landlord rules meaning more amateur LLs will sell off their BTLs.

Plus in another year she’ll know more about her likely future earnings pattern, her relationship status may have changed, her friends may have moved… if the market was rising and if she could afford what she wants, I wouldn’t hold off just for these reasons but in the current circumstances I would wait.

You guys are the best. So many amazing ideas and thoughts.

@minipie We have done exactly that with money for DD2. Sold a house and put it into high interest accounts. You need more than one. When she’s ready, the funds are only 1 year away at most. Or less. DD2 isn’t ready yet but we didn’t want to be landlords any more.

Epsom is a great choice - plenty of commuter lines, good shops /restaurants, nearby countryside etc and way more for your money. £300 k will buy a 2 bed flat

It really is an iconic and architecturally significant building!
https://blog.modernistestates.com/post/93578958270/modernist-lives-eva-tyler-pullman-court-london-sw2/amp

Iconic maybe. But no one wants to buy the flat. Epsom? Do 20 somethings aspire to Epsom? Mine wouldn’t. Having London life is still important to them. Many single young women don’t care about countryside if they’ve lived in Clapham. A park will do.

@Flockameanie I grew up in the area & I guarantee very few people know what & where Pullman Court is!

Iconic maybe. But no one wants to buy the flat

Quite!

I live in the area (sadly not in the building) and guarantee that many people are very aware of it, visit it on open days, and say ‘Oooh, near Pullman Court?’ when I mention my area.

But I do have friends and colleagues who are artistically and architecturally literate.

It is true that the market, and especially for flats, is pretty stagnant though.

Those (few) 20 somethings in a position to consider buying somewhere (mostly relying on the bank of mum and dad might I add) are realistic enough to know that they need to cast their eyes further out to get somewhere affordable. For those that still prioritise the London life, well they won’t be thinking about buying quite yet (unless one of the fable NQ solicitors or bankers in £100k plus salaries!)

@VanCleefArpels The OP has said what her DN can spend. It will buy something fairly close to where she lives now - Clapham. She doesn’t need to extract herself away from friends and a social life. Most lower wage earners we know wait until they have 2 wages. This DN has £120k deposit but we don’t know where from!

Why is she so set on freehold? It’s going to really limit her. St Albans is a great area. Train line that is very fast and regular goes to Gatwick, Luton, Brighton. Daughter lived there for 7 years and would love to still be there but couldn’t afford a family home there. £300k should buy you a leasehold or freehold one bedroom flat near the station.