Buy or Rent in London/South East, or Leave?

[anonymous-user]

Hi guys

I'm desperate for my own place and to crack on in life but I've been in somewhat of a dilemma needing to live within the M25 for work and was after a bit of advice.

I am 23 and earn about £40k. I've already resigned myself to the fact that £40k is buttons in London and can only afford to Rent/Buy in some 'not so great' areas like Thamesmead, plumstead, abbey wood, etc, although with cross rail coming to the area they could see an increase in value.

Rent is about £800PCM for a one bed flat where some 'fixer-upper' 1-2 beds can be had in the £150,000 - £170,000 area. Ridiculously cheap for the London area but that's still enough to stretch my finances pretty tight, and given I won't have a huge deposit (crica £15k) I'm wondering if I'm likely to even get a mortgage in the real world?

Renting seems great for as a short term situation, but I'm worried that if I did that I'm going to end up trapped paying someone else's mortgage for the rest of my life.

The third option is leave London. If I could do this and take my Job I would, but I can't. Trouble is that if I were to same working in a similar industry outside of London I'm likely to see around 25k, which makes me think that I'm unlikely to see much benefit from lower rents, and I imagine a 25k salary would again wipe out any chance of owning something in the near future.

Any thoughts or input would be greatly appreciated.

Thanks .

[CoolHands]

IMO stay in London. You earn a stload of money for your age - you need to save as much as possible for 6 - 12 months (should be able to manage 1000 per month) add to what you've got then buy a flat, do it up over a year or two, sell and buy another..

If you do that you'll be sorted for life and when you look back in your 40's you'll be pleased you did. If you move out of london you've had it.

Edited by CoolHands on Sunday 24th May 19:10

[greygoose]

You could always buy outside the M25 and commute in?

[numtumfutunch]

I lived in London as a bachelor and rented in Z2 as I was skint

Met girl, got married and bought a house also in Z2 "a long time ago"

It cost a lot more than I thought was sensible as at the time the market was overvalued in my opinion
Sold 4y later for a ridiculous amount more than we paid for it when we relocated - again I thought the market overvalued

10y later Ive just seen our old place has gone for double again what we sold it for

London prices seem to defy sensibility
The oversupply brigade will tell you to buy, buy, buy

Im a bear but my own experience has questioned by pessimistic thoughts on property

If you buy prices only go up dont they?
And everybody in London earns enough to fuel a 500k mortgage on a 2 bed flat in Hanwell..........

Hmmmmmmmmmmm

[iain014]

Personally I would stay and try to buy in London and do your best to stomach it for as long as you can. Then in 4/5 years time you should be in a position to be able to take your pick of whichever commuter town you fancy.

Or try to find a commuter town now which will likely see an improvement in links to London at some point soon, anywhere on the Crossrail route will do.

[Volition]

You're only 23 and you earn a very good wage in London. I have friends my age (early 30's) who are on around £26-35k living in London.
My advice would be to keep saving as much as you possibly can and when the time is right you'll have a good deposit to put down on a property. Stay in London if you can and when you get on the ladder in the South East it will open up your possibilities further. Once you move out of the South East and buy, it's very difficult to get back into the South East later in life due to the cost of living.

[AyBee]

I'm in a similar situation (although you can increase age, salary and deposit) and I'm wondering the same. There's a 1 bed flat across the road from where I currently rent - asking price: £425k It's a crazy market. I could probably stretch myself to that if I wanted to, but I wonder whether I'm not just better off buying 2/3 BTLs somewhere outside of London and continuing to rent in London (I pay £750pm for half of a nice 2 bed in a nice area of SW London with a garage for the Lotus).

[okgo]

Find a bird who earns some money 2 x average wages = one good one = enough to buy somewhere where you might not get stabbed to death.

[dazwalsh]

40k? Move to the north, and enjoy a life of luxury

[Phateuk]

dazwalsh said:

40k? Move to the north, and enjoy a life of luxury

op said:

outside of London I'm likely to see around 25k

[myvision]

Buy in London and rent a room to someone who works during the week and goes home in the weekend.
With Thames tunnel starting next summer and cross rail still going there will be loads of people looking for digs.

[anonymous-user]

Thanks for the input everyone. I have been mulling it over! .

One of the perks of my job is being 'based' from home, hence needing to be within the M25 and meaning travelling in wouldn't work.

Its awkward as the job is about the only thing really keeping me here as it is a city that I don't really care for, BUT, I just want to make the right moves that will ultimately set me up the best for the future and getting a place in London seems like one of the best ways of doing that.

I think short term the only thing I can do is save money and revisit with £15k-£20k in the bank. Once that's in there I'll either be able to afford a place here or I won't. If I can't I'll either have a look at the logistics of right to buy on my mum's place to get me/us some sort of investment in this dump of a city or leave entirely.

[mikees]

What about Watford? Hillingdon? Etc 130k one bed look ok on rightmove or just outside cheaper still.

[SELON]

Personally I wouldn't invest in anything that I didn't think was good enough for myself.
You declared your deep dislike of for London in your posts, so don't buy a property here and let someone else have a home and also you can contribute a tiny amount to not inflating prices for those who do want to live here. Buy a home for yourself where you do want to live and go there. Life's too short to live in a place you hate to be, whatever you're salary.

[TVR Sagaris]

What do you do? I'm surprised at quite the difference in income between London and the rest of the UK.

[okgo]

TVR Sagaris said:

What do you do? I'm surprised at quite the difference in income between London and the rest of the UK.

Most things as long as you don't work for a big corp are a air bit higher in London. London weighting at big corps is generally st, but outside that its usually a fair bit more in most jobs I think...

[anonymous-user]

TVR Sagaris said:

What do you do? I'm surprised at quite the difference in income between London and the rest of the UK.

Currently work for one of the big breakdown firms. Relocating within the company isn't feasible at this point (as you imagine once one leaves, everyone will want to!) So if I left London, I'd imagine I would end up doing something in a garage instead, hence the lower money.

If I could get the same/similar paying job I'd be out of here tomorrow!

[bigunit00]

279 said:

Currently work for one of the big breakdown firms. Relocating within the company isn't feasible at this point (as you imagine once one leaves, everyone will want to!) So if I left London, I'd imagine I would end up doing something in a garage instead, hence the lower money.

If I could get the same/similar paying job I'd be out of here tomorrow!

You are 23 - what is the rush? ........save hard for a few years and the take stock with a larger deposit and better access to mortgage deals. You might also be more certain on where you want to live etc.

[anonymous-user]

bigunit00 said:

279 said:

Currently work for one of the big breakdown firms. Relocating within the company isn't feasible at this point (as you imagine once one leaves, everyone will want to!) So if I left London, I'd imagine I would end up doing something in a garage instead, hence the lower money.

If I could get the same/similar paying job I'd be out of here tomorrow!

You are 23 - what is the rush? ........save hard for a few years and the take stock with a larger deposit and better access to mortgage deals. You might also be more certain on where you want to live etc.

Because I want to move out. I don't think it really is fair on my mum to continue to support me now I'm well into adulthood, especially when we don't really have to space to support it (3 people in a small 2 bed flat). It can be done for another year (so I'd be coming up to my 25th) but another is pushing it for me morally, hence the rush.

But selfishly I am also thinking about the long game. I could be out in my own rented place tomorrow, but its going to cripple my saving power and leave me on rental treadmill potentially forever with no future/end game in sight.

Hence this thread, for me to try and get some input to try and work out what would be the best compromise

[anonymous-user]

Why not do both?

Buy a property that is in a decent commuter area and you know you will be able to rent, then after 6 months declare your intention to rent said property out to the mortgage holder (from 0 - £350) and give yourself the flexibility to move around and rent whilst someone else pays off your mortgage!

I have two houses in the UK I rent whilst I rent in Germany, well work pay my rent but the same thing! It means I have the flexibility to relocate whilst knowing I'm am not stuck in the rental cycle.