London first time buyer: house v flat and which areas to look at?

[GoldOnyx]

I’m a first time buyer looking to buy in London and I’d appreciate your advice please.

I earn £40k in a stable job in London (public sector), so would be eligible for a £180k mortgage (going by being offered a mortgage 4.5 times my salary). I’m very fortunate to have a £520k deposit, due to an inheritance. My budget altogether is £700k.

I’m unsure whether to buy a house or flat, and which area of London to buy in, and would appreciate your thoughts please.

Re buying a house v flat, my head is telling me to buy a house, for reasons of future-proofing (although currently single with no kids) and as houses are generally better investments and you can do work on them. Re buying a flat, I’m tempted to buy one because it would better suit my current needs and lifestyle (don’t need somewhere big). However, I’d prefer a freehold flat for flexibility and cost reasons, and these aren’t very common, and would also like a garden, so my instinct is saying to buy a small-ish house that I can extend upwards/outwards, with a garden.

Re which area of London to buy in, many areas are of course completely out of my budget. I’d like to live somewhere with good access to transport (within 10-15 mins walk of a tube or train), zone 3 (ie not too far from central London) and that’s pleasant to live in. I rent in Acton (west London), but can’t afford to buy there. I’ve mainly been looking at Streatham, as it’s within my budget, and it’s a nice area, but I’d be very grateful for any other suggestions anyone might have re areas to look at.

Thanks!

stratford and West Ham, both have roads lined with Victorian houses that you could buy for £600-700k both on jubilee line so 30mins on tube from Westminster.
Or Kilburn?

I lived in Kennington at that point in my life and completely loved it. You could easily walk to work from there - everything is mega central. This is share of freehold - I loved that street https://www.zoopla.co.uk/for-sale/details/68908894/?search_identifier=5f7b2fa4726f834a819d353c21015b572a645bc07414eab8eac55fd955d9c895

Everything will feel overpriced in and around London, that’s just the state of the market.

Kilburn is expensive these days.

Catford is far cheaper and popular with young families. But a bit quiet, the town centre is grotty, and the commute to Westminster isn’t the best.

I know MN is allergic to leasehold but I really think at your age and time of life a flat would be a great option. Not a brand new swanky block with a skyhigh service charge and a dodgy management company, but a small, well maintained modern-ish block with a residents association as the management/leaseholder or perhaps a conversion would work great, and looking at flats will open up your options so much more. One great tip is to look for ugly 60/70s-ish built blocks, because they look tired from the outside people under-value them but so long as it's been well maintained they're often quite solid with higher build standards than today's flimsy/dodgy cladding ridden large developments and often they're quite generous with their room sizes and of course you can then do it up nicely inside.

I don't know Acton at all but there look to be lots of very nice 2 bed flats in the area for your budget, including some that are share of freehold. Like others have said flats hold their value perfectly well in London, perhaps if you're purely thinking in investment terms a do-er-upper house would be a little better but you're looking for a place to live first and foremost so I wouldn't worry about that. yes Ok if you marry and have kids you'll probably need more space eventually but lots of Londoners cope fine in their two bed until the kids are primary age or even longer with the kids sharing a room, so I would think you could stay 10 years or more quite happily in a flat which would be great and not really that different from buying a small 2 bed house which you'd probably also need to move from eventually?

I really would not buy a flat, nightmare with the service charge every time, always buy a house if you possibly can. Good luck.

I know someone who is looking to buy here - Wandsworth/Tooting - it looks lovely but I don't know about leasehold situation :

https://www.cityandcountry.co.uk/find-a-home/the-1840-st-georges-gardens-london/

I wouldn't recommend Burnt Ash Lane to live on, particularly for the OP who is looking at places like Streatham. That house is not walking distance to anywhere, the road is busy, noisy and dickheads drive way too fast down it, Grove Park is not the nicest station at night, the list goes on...

I'd recommend Penge or down to Penge East

https://www.rightmove.co.uk/properties/149798786

https://www.rightmove.co.uk/properties/152569607

I checked what was available before suggesting.

Catford is a reasonable commute, true.
but more expensive travel costs.
according to tfl calculator

This is sold but have a look at Forest Gate, E7. It’s on the Elizabeth line, close to Stratford for shops and good connections, loads of green space on Wanstead flats.

Choose the roads near Wanstead flats, north of Romford road. You could get a lovely 2 or 3 bed house with your budget.

www.rightmove.co.uk/properties/154291511

I was looking at my old 2 bed house in Tooting yesterday, sold for £560k in summer but there are similar between tooting bec and Broadway. Had garden, not far to tooting bec green space, commute not terrible to Westminster.

I think something like this is a great option. You also need to consider if you’re happy maxing out your monthly budget on a mortgage. You don’t mention your age but having money spare to enjoy London is important too.
I lived in this area for years through mid 20’s to mid 30’s with kids and absolutely loved it.

www.rightmove.co.uk/properties/153919823#/?channel=RES_BUY

I just can’t find anywhere that doesn’t seem overpriced. Can anyone advise on where I could look please? well that's London for you!

Personally, I would not spend all of my inheritance on property. I would buy a large two bedroom flat with balcony or outside space and let out one of the rooms to a friend or colleague for a year or two or until you find someone you want to settle down with.

South East London is cheaper than anywhere else really, apart from the further East stretches - but East wouldn't make sense with your commute. I'd look at anywhere with a train line into Victoria, or bus route into Victoria and Westminster and enjoy a nice simple commute. You don't need a tube to get to work quickly if you have an overground station near to home - the trains are really fast. It takes about 20 minutes on the train to Victoria from where I live (SE) on the zones 2/3 borders.

I would strongly suggest Brockley (SE4) or Crystal Palace (SE19) as areas with plenty of life and down to earth people. Honor Oak is nice but possibly you would consider that overpriced as it's a bit more expensive.

I would not buy a leasehold flat (I used to have one in London and it was a pain...).

I would always go for a house if possible.

I would look at South East London and places like Beckenham (you can easily get a train to Victoria) or Crystal Palace, Penge.

Or East London with places like Wanstead, South Woodford, Woodford Green and Buckhurst Hill. Oe even Leytonstone.

I would not buy in Stratford, West Ham or Forest Gate.

Depending on where you work you could also expend your search to somewhere outside London. Places like Hitchin, Leigh on Sea...

https://www.rightmove.co.uk/properties/152646386#/?channel=RES_BUY

This is gorgeous, and it’s on the Victoria line.

It sounds to me like OP’s parents want to make a gift in lifetime, hence her mentioning the 7 year rule. So these funds aren’t actually her whole inheritance.

That budget and your stage of life id go for a big garden flat (Victorian conversion) with share of freehold, in a good area. You can have a kid/partner etc with a second bedroom and a nice setup. No point moving away from everything. I'm a fan of south London so I'd suggest Clapham/Balham but you'll get plenty of good north of the river suggestions on here. You also wouldn't need to spend your whole budget, so might feel like a better deal and a miniscule mortgage can't hurt!

Don't go miles out in your twenties and thirties. This is a nice flat in a really central location 2 bedroom flat for sale in Brook Drive, Kennington, SE11

Re the IHT and the 7 year rule, if they give you the money now the 7 years starts ticking regardless of how long you take to find a home and complete the purchase. You can put it into an NSandI account till ready to use it. Then you will remove the time pressure you currently feel.

If you will never be a driver then I would factor in close proximity to tube / train as a key requirement especially if you are looking at houses to minimise the number of future moves you do. That extra 5 minutes walk each way 6 days a week is an hour a week of your time and you have do it whatever the weather and whatever you are carrying. If you can find somewhere that also has a bus option if the walk is long than that will obviously help.

I wouldn't rule out a flat completely. I live in one in London which is in a development of 65 flats. My lease is about 970 years remaining. The managing agent organises all repairs of guttering, roof, etc, maintenance of grounds, cctv etc. Yes you pay a service charge for all this but it's less hassle than sorting out your own guttering, gardening etc and my heating bills are very low as it's new build with only two external walls. Period properties look lovely but can be draughty and can need a lot of maintenance.

I would say focus on the area you want to live in first and make sure it has the shops, amenities and transport you need now and think you might want in the future and then see what is available in that area for both houses and flats.

Nice flat, although the 87 year lease needs extending. I don’t think that would cost more than £20k?

We just extended our lease, and did it at the same time as the three other flats in our Victorian conversion. I think what we paid was £1200.

Flats are fine short term but watch the lease length or you will need to extend and it costs ££££. I know, I'm in that right now. If you are in it for the long haul look at freehold properties where this is not a worry.

One thing to remember too and is rarely mentioned is that there is taper relief on gifts - if your parents only survive 4 years you don't pay 40%

Hi all, thanks very much for your thoughts! I really appreciate your feedback.

I’m coming back on here after thinking about what my priorities are re buying somewhere, and think they are:

• 2-bed/3-bed house with potential to extend (would prefer not to buy a flat, due to leasehold costs and restrictions etc)
• £650k max budget
• Work in Westminster/St James Park and likely to stay here for foreseeable future
• Keen to find a house with 45-50 mins max commute and in an area with green space and a nice friendly vibe and cafe culture

In terms of areas I’ve looked at, mainly Streatham and Hanwell, but can’t afford them now. Also considered South Woodford, but can’t afford it, and definitely can’t afford Acton, where I currently live.

In terms of areas I’m considering: Bounds Green, Abbey Wood/Woolwich, Alperton/Wembley, Barking/Upminster. What do you think of these areas, and are there any others I should consider?

Ideally, I’d like a small freehold house I can extend in an area that’s showing potential, with good transport links, and that’s okay to live in. Any other areas I should focus on?

Would really prefer to stay in London rather than moving out, as I think moving out would be quite isolating for me and I don’t think I could afford the commuting costs.

In terms of compromise, I’d rather compromise on space or condition (e.g. buy somewhere smaller or in need of modernisation/revamp, but not too major, so I could still live there) or live somewhere ‘with potential’ rather than moving out of London.

Haven’t seen much on the market recently, but I am hoping more will come onto the market in the new year. Thanks!

It sounds like you’d rather a house with potential in a rough and ready area, that may or may not ever improve, over a 2-bed flat in a lovely area that may never gain value.

It’s odd though that you’re concerned about the costs associated with a leasehold flat, but would want to extend a house! Costs of extensions are very high and they often don’t add value.

Anyway - how about this doer-upper in Catford? You could get to work in 45 minutes with a good wind behind you. No need to ever extend. Potential to add value. And you could get 2 lodgers for a potential income of £1400 a month, of which £7500 is tax free.