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?

That's great, but I'm going off OP being into Shoreditch/central living, which is all about that lifestyle, and if they think Clapham seems far out, even though it's Z2, on the tube and has lots of lively bars etc., then that part of Streatham will be deadly. Taxi fares don't make up for the vibe when you leave your front door and as I say, I pay those fares and it's long ride, sometimes a struggle to even get an uber to take you that far from the centre, and a ballache I wouldn't have wanted in OP's phase of life. With the budget she has, there are plenty places further in that might still feel suburban to her but get best of both worlds. The Kentish Town/Tufnell Park suggestion was promising or the area around London Bridge. Places you could still go out in or even stagger back from town to at a push.

Agree with Tufnell park as at least Eleanor palmer is there

You could buy a two-bed somewhere like Clerkenwell with that budget. Many families live in flats there. Best of both worlds and you can walk to Shoreditch or Soho or Islington in 20 mins.

Eg:

https://www.rightmove.co.uk/properties/87145356#/?channel=RES_BUY

https://www.rightmove.co.uk/properties/161458238#/?channel=RES_BUY

www.rightmove.co.uk/properties/153278243#/?channel=RES_BUY

Dunraven is fine (I live locally too), but it’s not so amazing school or hard to get into that you would move across London in order to get your child a place there before said child is even conceived.

If OP wants to send her theoretical future children there, it sounds like they will have plenty of money to buy a house in catchment there in 5-10 years’ time. But they may not even still be living in the UK then.

I think for me it's a peace of mind thing. You don't know what happens re incomes and jobs but at least you know if you can pay the mortgage, you have a roof over your head, bedroom for the kid and a decent school for them. I think it's a bit too hard core to move out of London for a family house with garden as you are potentially spending a lot of time and money on commuting before you even need the space so zone 3 is a good compromise or zone 2 if there is a good primary school.

i am not familiar with sw london so don't know what's good but heard of that school being mentioned here.

i am not familiar with sw london so don't know what's good but heard of that school being mentioned here.

Ah okay, that makes sense. It is a decent school but as @LemondrizzleShark says, it's not something that a mid-20s couple would plan their future around. The reality of living around there would be dull for them and the travel would be a drag. I get your peace of mind thing but it's very much the preoccupations of a parent and they've plenty of time (and probably money) for that down the line.

My first advice would be to avoid leasehold like the plague especially if it attracts a hefty service charge, even more so if that's set by a 3rd party. It caps the rate your property will appreciate.
Secondly, life moves fast. It's likely unless you relocate again you won't see 2 yrs go by, so is a 1 bed suitable for your 5 year plan?
Thirdly is there a chance you will relocate again? If so would you wish to rent it out. It's worth bearing in mind the rental-ability of the property rather than the luxury choices you might make as a couple.

Then, where do you want to be as a couple in 5 years? Married about to start a family? What sort of price point and location would you want to be in if you had the proverbial 2.4 kids and childcare costs of £2k per month [yes really] per child in Zones 1-3? If you've lived the high life and done the minimum of saving for 5 years, your budget for a nice part of London is going to be difficult. Does £700k in Shoreditch [with minimal appreciation] represent the best ROI or should you be setting aside a hefty chunk of change in a vehicle to invest in your next property?
By all means stay in Shoreditch but if this is the top of your budget it might be sensible to not max out and to have lots of fun now but not at the expense of some serious long term gains.

Lastly - when we bought our first property and no longer shared with others, our attractiveness as a free hotel for friends and family increased substantially. Other people on your sofa for a week especially if you work in a hybrid way gets old very quickly.

How long do you want to live in a flat for?
Do you eventually want a house?

All these things would influence my decision, ideally if I wanted a house at some point and wanted it sooner rather than later I would think very carefully where I buy a flat & what I pay.

Stamp duty makes frequent moves prohibitively expensive particularly if your flat doesn't keep up with inflation.

Invest in your relationship and go with the fun option in Shoreditch.

You’ll only get one chance to live right in the centre of London like that AND be young.

Enjoy it - it’s an investment in your happiness and your relationship (and probably your career too) - and it’ll give you both many happy memories to look back on once you do inevitably move further out later in life to start a family.

Clapham itself is where the home counties and other rah rah type settles in London.

This is true 😆

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.

Move to the outer boroughs, it's where a lot of the best states are anyway.

Dunraven is fine (I live locally too), but it’s not so amazing school or hard to get into that you would move across London in order to get your child a place there before said child is even conceived.

Agree, Streatham is also one area really suffering from falling school rolls. Think it's the worst in London. That's a huge knock on effect. Dunraven used to be a much better school results wise.

I live in an outer borough zone 3 barnet and I am still in a 400k flat. I am within catchment for the top 15 state primary schools in the country (faith school but we belong to that religion). I bought when I was 26 too so younger than most London ftb, never paid rent with my salary in my life (either lived with family or parents paid my rent in university). Dh has never rented in uk before, he did pay rent while studying in Europe but he paid using student loan (100% paid back now) or his grandpa helped him. So we are luckier than most.

My colleague in pinner is selling his 3 bed tiny terrace for 625k. Zone 5. I wouldn't want to pay that and childcare and hope to have a pension given there wouldn't be a state pension. Medical bills another factor as I suspect nhs wouldn't last another 10 years , we are already paying privately rather than languish on waiting list and dh's company pays for health insurance but we still have to pay hundreds of pounds in prescriptions. I expect as we grow older this would increase.

I wouldn't want to overcommit to mortgage just because we can't rely on the state for health or pensions and a mortgage is a long term commitment. Fair enough if you have a lot of equity though!

By outer boroughs I meant z4/5.

You love your flat which is great 👍🏼

I wouldn't want to overcommit to mortgage just because we can't rely on the state for health or pensions and a mortgage is a long term commitment.

If young people have to save for private healthcare & no state pension then a lot won't be taking out any mortgage...

But I thought you were looking at private schools? thats a whole chunk of money that can towards a mortgage...

I know this is boring but I absolutely would not buy a property with a partner I wasn’t married to.

Moving on…

Are children in your future, OP?

That's true but childcare fees in the first four years are also 2k per month. And even with free hours it would be the same for multiple children. So my initial point was you would probably be in flat for many years anyway just cos of that. Also re private school there is a reason why I live near good state schools, I can reevaluate in 4 years time. A mortgage on the other hand you pretty much can't get out of without selling and incurring all the related costa.

I am 32 and no one my age believes there will be a state pension when we reach our 60s. I also don't see how nhs is sustainable long term.

I lived near Old Street at your age, op, and it was ace- so close to everything, could walk to work, fantastic vibrant area and I also love the history of that part of London around Bunhill Fields. So I’d say Shoreditch unless you have a very good reason to want a second bedroom.

Clapham is nice too. Horses for courses. If Shoreditch means you could walk to work that’s worth a lot though.

To what people have been saying about flats not increasing in value- I fear the days of any property being a guaranteed money maker are long behind us. House prices have been flat in real terms for a decade. So I’d go for what you want and treat it as primarily a lifestyle decision not an investment decision.

That's true but childcare fees in the first four years are also 2k per month.

Thats still very different to committing to years of school fees.

I am 32 and no one my age believes there will be a state pension when we reach our 60s. I also don't see how nhs is sustainable long term.

There probably won't be a state pension in your 60s, the age will move out. Not the same as no pension.

It's not like renting is much cheaper... Most of the younger generation is guaranteed to live in old age poverty as the state won't be able to provide free healthcare and pension while inheritance will increasingly be taxed.

It's not like renting is much cheaper...

Never said it was...

Most of the younger generation is guaranteed to live in old age poverty as the state won't be able to provide free healthcare and pension while inheritance will increasingly be taxed.

So why would you bother working at all?

OP has deserted this thread...

Why do people in America bother working when they can easily be bankrupted by a medical bill. In fact they work longer hours than us. In my home country we don't have pensions only forced savings of 36% of income (which also have to cover healthcare and housing) so if you have a low income you wouldn't really have a proper pension and even for middle earners the savings aren't enough without supplementing it with private investments.

Actually lack of pension and lack of healthcare would mean people work longer and harder. The European style welfare state with state pensions and free healthcare is a historic anomaly borne out of a sense of egalitarianism after 2 world wars .It isn't a given or a guarantee esp 80 years after the war.

Op is only in her 20s, she would have many years of no welfare state or a crumbling one ahead of her. Pre world war 2, most people rented and paid for healthcare privately.