Buying first property - Central or Sensible

[hibernianduck]

Looking at buying my first property with my boyfriend. We are both mid 20s. Saved up the 10% deposit and SDLT on our own and London based.

Our budget is roughly £700k. For this we are either looking at a one bedroom that is walkable to work near Shoreditch, or we’re looking for a two bedroom further out, somewhere like Clapham.

I want to go sensible and get the two bedroom further out. Boyfriend wants to buy as central as possible and thinks guests will be fine on a good sofa bed in a sitting room.

I understand the appeal of being central, but I also don’t want to waste another £30,000 on SDLT and moving costs in a couple of years time.

Thoughts?

We chose to live centrally in zone 1, in a similar situation, but we could afford a 2 bed so didn't have the same dilemma. We stayed there for 9 years, including after having 2 dcs, and we didn't feel a rush to move further out as there was lots going on for families and it was great being so well-connected. We didn't move until we needed to consider schools. We didn't gain much in equity though as prices didn't increase, but we made gains in other investments which did really well, which allowed us to move to a house.

I don't think it's sensible to buy and sell within 2 years though, because of stamp duty and moving costs as you say, but also the stress! We're not planning to move again now until our dcs are adults.

We live in a house in zone 2 now and although it's less central, it's walking distance to work (in zone 1, but we are just one stop into zone 2) which is what really makes a difference to quality of life for us. So I'd choose Shoreditch if it means being able to walk to work.

So you're planning to get a mortgage for £630,000 REALLY? WOW! You must earn a fortune to pay that back in capital repayment. Is your mortgage 75 years long????? That's almost £4500 a month Cap+Rep at 5% over 30 years. So you want to pay £54,000 a year for a one bed in London before even making a ham sandwich. Wow.

Clapham out of the way?! It's only got 3 tube stations.

Clapham only good if you are a conservative Tory type of person. Shoreditch if you lean more Momentum.

I would likely go central if only in mid 20s, way more fun there. If you do decide to go to Clapham, consider renting or even airbnbing a place for a few weeks or month to see how you like it.

You hear horror stories on here, of people who moved and then hated it. Its a relatively cheap way to test an area just rent a place for a few weeks when you are in London and see how you like it.

We also found where exactly within a neighbourhood we wanted to buy when we rented there first.

May want to check this thread out again closer to the time of buying as lots of helpful ideas on how to get the best surveys, people were very helpful with damp considerations etc.

What an odd take. Clapham council is almost entirely Labour with some Lib Dems. Clapham MP is Labour. Green Party came in third, Tories fourth. The area has usual south London mix across the full spectrum of areas from fancy parts and not so fancy. As I said, I've no particular drum to bang for Clapham, but it feels like some people must be talking about a Clapham on another planet.

Flats don’t go up in value the way houses do. Buy a house and jump forward to where you’ll want to be in time, anyway. Then you can be all pleased when younger people resent you for buying a house at what they consider a low price!

Not a bad idea re. house. Something like this isn't suburban. Nice third way maybe -
www.rightmove.co.uk/properties/161367926#/?channel=RES_BUY

Joke presumably? Area's been Labour as long as I can remember.

Well that is because the constituency is shared with Brixton. Clapham itself is where the home counties and other rah rah type settles in London.

I wouldn’t live in Clapham but there are nice places outside Shoreditch that don’t mean the suburbs.

Flat prices are tanking, I bet you could buy a 2 bed in or at least near Shoreditch for less than 700k.

Completely the opposite to what you're looking for but this is what £700k you in Chislehurst & surrounding areas of SE London

https://www.rightmove.co.uk/property-for-sale/find.html?minPrice=700000&index=0&sortType=2&channel=BUY&transactionType=BUY&locationIdentifier=REGION%5E322&displayLocationIdentifier=Chislehurst.html&minBedrooms=3&maxBedrooms=3&radius=3.0&maxPrice=700000

How about somewhere like London Bridge? You’d get a two bedroom period flat for £650-700k, and still be in Z1/be able to walk to work and home after a night out.

It’s about £3400 over 25 years at 4.4%, and there are lots of 4.4% five year fixes out there. Perfectly affordable if they both earn decent professional salaries, which it sounds like they do.

I’m sure you’ll be back to say you can buy a six bedroom mansion for 20 pence where you live - good for you.

I would go 2 bedroom because moving house is expensive and one bed will wear thin very quickly.

How can most people (not on 200k to 250k combined) afford a 3 bed house in good school catchment in London while paying 2k in childcare fees. I am considering private but wouldn't want to live anywhere not within good school catchment up till secondary as insurance (that alone restricts me to flats). So I would always live in a flat esp when childcare fees are concerned and this does mean a starter home budget for 8 to 10 years even if dc go to state primary.. 2 years saving after paying deposit, ttc, 1 year gestation, 4 years until kid goes to primary school, more if there are fertility issues. Unless you are ttc before buying but then how do you get the mortgage for 3 bed house on mat leave or during childcare years.

And my dh had a vasectomy when I was 6 months pregnant for the first time. So on basis of 1 DC and not paying for multiples. I thought there was a reason for the bunk beds in second bedrooms

Neither. Buy a 3 bed share of freehold flat for 450k (well below 500k stamp duty threshold for ftb) in streatham, 0.2 miles from dunraven school which is highly regarded .

I had a 58k deposit in 2019 and was borrowing at 2%. I bought a 400k flat which allowed me more financial flexibility and could benefit from a lower stamp duty bill. I did buy a 2 bed as dh only wants to live in nw london and our areas within good school catchment is more expensive plus planning on one child.

https://www.rightmove.co.uk/properties/162147482#/?channel=RES_BUY

https://www.rightmove.co.uk/properties/159596000#/?channel=RES_BUY

I bought in London zone 3 too with the same kind of deposit aka 58k but surely one should buy something that is 500k or below for ftb stamp duty discount and also financial flexibility for childcare and also to pay lower mortgage interest..always thought those who bought more expensive flats were people with huge deposits (usually gifted ) so less pressure to build equity. 50k is a small deposit in London and that was the case for me in 2019 with 2% mortgage rates and a 400k budget. Now even more so due to interest rates, the average ftb in London has a 150k deposit and a 450k budget.

Even if not planning for dc, why spend so much on mortgage interest. Main attraction of buying is housing stability and whether you spend 450k or 700k on a flat, the result is the same and you can still find flats in decent areas for 450k to 500k.

Central

6 bedroom houses where I live, are around £1.5 mill but there was a bargain down my road for a 5 bed detached and that sold within a few days at £925,000. So there are deals to be had around my area but not for 20p
I'm also aware that people have kids, and may have many curve balls regarding their health, families kids etc, so when you stretch yourself financially and assume you will continue to earn what you earn forever is naive at best, I've learnt that the hard way, there's nothing wrong with providing cautious advice.

Not based in London so can’t advise on location but I bought my first property in my mid 20’s and my two criteria was close enough to the center (as living far away from all amenities wasn’t an option for me) but my main criteria was I didn’t want to « outgrow » my home.

I was conscious that once I bought I didn’t want to feel cramped after a year and that it could be my « forever » (or at least very long-term) place if need be. As I wasn’t sure what my plans were kids wise etc… and wanted to have the option without it coming with a mandatory move to have more space. So I bought a 3 bedroom property away from the hyper center (but very well connected with transportation and 15 minutes max by car).

By doing so I got more for a lot less money, and used those savings and what I could further save to now have bought a second property (this time in the center), it’s also a 3 bedroom property but has 30sqm less than my current place, and so I will be renting it out and staying in my home. In the end sometimes when I go to the new place I think about how convenient the location is, but then I also love the slightly more peace and quiet of where I live and love the spaaace.

Some people would rather live in a shoebox as long as they are the most central possible, especially as they are very social and spend most of their time outside the home. If you are more the kind to spend lots of time at home I would say space is important. if you want a family space is definitely important, and I would even argue that to keep a relationship healthy, space is important. I wouldn’t make a decision based on guests and would more so make a decision based on what lifestyle you currently have and what lifestyle you plan for in the near future.

As the title of the thread is Central or Sensible, I think you pointing out the large debt burden and high LTV falls under Sensible.

That's so far from central and not even near a tube. It's where you'd consider when school catchments are the priority, but pretty deadly for OP's time of life. And I'm saying that despite living near there, but it's the kind of move you do for the kids not yourselves, as it's a PITA always having to get buses, it's a looong way home from a night out and there's nowhere decent to go out around there until you get to Brixton, or Clapham come to that.

5 years of taxi fares (most people I know start considering kids at 30 if they have partners) for nights out wouldn't remotely add up to the cost difference between a 450k flat and a 700k flat if that is the only reason. I bought a flat based on school catchment when I was 26. It's probably the top reason I am a happy flat owner cos even though my flat hasn't grown in value in the 6 years I have owned it, it is a good investment in my son's education for the next 11 years no matter what happens.