Buy a London flat on a budget (Buyers Guide: Houses)

Member Name: leenewham

Product:	Buyers Guide: Houses
Date:	12/09/01 (1824 review reads)
Rating:

Advantages: Good investment

Disadvantages: financial ties

Yep! It's not easy, not at all.

I had been looking for about two years. I was renting in hampstead (£400 per month) in a 3 bedroom flat that sold for £120,000 3 years ago and is now worth nearer £300,000. To buy the flat I was living in I would have to be earning in the region of £70,000, so that was not an option. And 3 years ago I couldn't afford the £120,000.

I renting was my only option. Paying money for someone to own the property I was living in. So I decided it was time to start looking to buy.

But when is a good time to buy?

"Just get your foot on the ladder...anytime will do" my boss said. His words made sense. "If the property market goes down, then you only miss out if you sell it, just rent it out and buy another while the prices are low..." he said. Mmmm, great if you can afford to move I guess, or pay for another deposit. So I decided that all the press reports about prices being too high made no difference to me and I set about trying to find the ideal property.

What can you afford?

most building societies and banks will give you a set multiple of your salary (normally 3-3.0 x your single salary or 2-3 x joint incomes). I realized that there was no way I could afford to buy a place that I wanted to live in, in an area that I wanted to live in on my own. So I decided to buy a place with a friend. This has some advantages:

1. You can afford something better than on your own
2. All buying costs are halved
3. You have company
4. You can share bills

And some disadvantages:
1. Everyone assumes your a 'couple' (rather embarrassing when your 'buying buddy' is the same sex as you
2. you have to decide on the right flat for both of you, so you may miss out after deliberating too long
3. If one of you wants to move out before the other, what do you do
4. because of the above point you will need to get a solicitor in
volved, which means a bigger buying fee
5. When you decorate you will have to agree on any alterations
6. You might fight over who gets the better room
7. You might end up losing a friend

So I decided to buy a place on my own!

What choices did I have left? 3.5 times my salary wouldn't buy me anything I would want to live in, in any area I would want to live in. So then I found out about shared ownership. this is when you buy part of a house or flat and pay rent on the rest. But you have to go in new build houses, priority is given to people on low incomes and they are heavily subscribed. The mortgages are different too, and it is harder selling 50% of a property than 100%.

Depressed I visited an independent mortgage broker. "yes, you can borrow up to £150,000. I was shocked. I could afford something worthwhile! And a two bedroom place so I could rent out the other room and share bills and I would be paying the same in a mortgage as I was in rent...great!

So my next task...Where do I want to live. Well, I had always liked Greenwich and after looking in the estate agents one day down there, I thought it was THE place to look. I had always liked the area, and property seemed good value.

The first place I looked at was huge...big rooms, great views, but a really busy road. And then it we downhill all the way...strange conversions, too small, too ugly, falling down, horrible part of Greenwich, I just couldn't find anything. I was sent hundreds and hundreds of property details, about 99% of which were inaccurate or not in the areas I wanted to be in.

And that was a huge mistake. Eventually an estate agent persuaded me to look at a property in Deptford...it was above a shop, it was huge, 3 bedrooms and it was cheap...but the area wasn't very good. I did some research and noticed that they were doing a lot of regeneration there. So I put an offer on the property.

I was too late.
Someone beat me too it.

So now I was looking, not for an area, but how much I could afford, and saw properties in Telegraph hill and Brockley. I instantly liked them, leafy, green, close to Greenwich and more laid back...and cheaper. and the transport links were great too. And close to the DLR, a great prospect for future house prices as there is a lot of building going on in Docklands for business premises.

Eventually I found a place. it's big, its sunny, its got 3 beds and a huge attic that is unconverted. It is ripe to be decorated in my taste and it is close to public transport...and it's in a leafy conservation area.

Well, that's my story, here is what I have learnt...and my tips on buying in London on a budget.

1. target an area, but keep your options open, there may be someplace nearby that you ' seen yet that you might like.
2. Try South East London. It's closer than you think. Areas like Brockley are very nice with lots of parking, wide streets and are still only zone 2.
3. Do your research on an area, the web is a great source of information.
- Do lots of the properties have net curtains in the windows (which indicate that they are rented and in deed of repair).
-Are there loads of skips in the road (which indicates that properties are being renovated).
-What are the cars like in the road (an indication of how affluent an area is).
- Do all the windows line up on the building or are there cracks running in the brickwork (a sign of ground settlement and heavy costs to come)
4. Visit an independent financial advisor face to face,,,websites are ok, but you get better service and more information and a more tailored opinion if it's face to face.
5. Consider renting a room when the place is purchased...paying all those bills on your owns is a daunting task. Owning a place is fine, but you also need a life!
6. When buying a place you can get good deals on solicito
r fees. www.assertahome.co.uk have details on fixed solicitor fees that could save you pounds.
7. Talk to others who have bought a place of their own and learn from their experiences...mistakes are costly and it's better to let others make them for you to learn by!
8. Check out places like Loot for cheap home furnishings, or go for some interest free deals...the more that you can displace moving in costs the better.
9. If you need work doing, why not contact a builder or plumber etc outside of London and get them to live in for a few days...especially if they are someone a family member knows or a friend. It could save you a lot of money!
10. When looking to buy a place, drive around an area and stay in touch with the estate agents...perhaps stay loyal to one or two agents...buy them a bottle of wine...they can tell you about properties as soon as they come on the market.

Well, that's about it for now. I hope that this has been of some use. I will add to this when I think of more things of use. I hope some of you can find that first place...good luck

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