Buying a flat

[jamesbrown]

Given it's a 10% deposit, he isn't going to get a very good rate is he. This coupled with the fact he will most likely want to let the property out at some point possibly in the near future, and cover both mortgage repayments and maintenance.

It depends what you mean by "good". When viewed in the context of a typical interest rate environment at this point in the business cycle, the current rates for mortgages with a 10% deposit look very favourable indeed. So, it's all relative. It's anyone's guess as to what will happen with the housing/mortgage market over the coming year or two, but mortgage rates are historically very favourable at present. Your point about long-term intentions is a good one though; it makes much less sense to buy, especially with a small deposit, unless your plans are firmly centred where you intend to buy, for several years at least.

[Peter Loew]

Are you saying anyone wanting to buy a 400k flat in London should ideally raise a deposit of 100k? Or am I reading this wrong?

I am not staying that at all. 'Anyone' might be perfectly fine buying a London flat for 400k with 10% deposit. It depends what you want to do with the flat. Do you plan to live in it for the next few years? Do you plan to leave the city next summer and let it out? How long is a piece of string? Etc.

[Peter Loew]

It depends what you mean by "good". When viewed in the context of a typical interest rate environment at this point in the business cycle, the current rates for mortgages with a 10% deposit look very favourable indeed. So, it's all relative. It's anyone's guess as to what will happen with the housing/mortgage market over the coming year or two, but mortgage rates are historically very favourable at present. Your point about long-term intentions is a good one though; it makes much less sense to buy, especially with a small deposit, unless your plans are firmly centred where you intend to buy, for several years at least.

Yes, totally agree.

[TykeMerc]

Are you saying anyone wanting to buy a 400k flat in London should ideally raise a deposit of 100k? Or am I reading this wrong?

Anyone? No, but you with your lack of knowledge and awareness of what the world is actually like (take a look at your posting history)... I'd say save up and buy for cash outright, it's safer.

[SueEllen]

Anyone? No, but you with your lack of knowledge and awareness of what the world is actually like (take a look at your posting history)... I'd say save up and buy for cash outright, it's safer.

He will still get it wrong.

He has no idea about service charges, major works, lease extensions etc.

He's much safer buying a house just outside London.

[heyya99]

I am not staying that at all. 'Anyone' might be perfectly fine buying a London flat for 400k with 10% deposit. It depends what you want to do with the flat. Do you plan to live in it for the next few years? Do you plan to leave the city next summer and let it out? How long is a piece of string? Etc.

I plan on living in for at least 8 years.

[Whorty]

I plan on living in for at least 8 years.

London property prices are unlikely to drop in 8 years, and more likely to rise by 2-3 % each year during that period.

Buy a flat in a good area, preferably one that has future extra transport links planned. Check out the Bakerloo Line extension and see what you can afford along that new route (Peckham, New Cross, Forest Hill, Beckenham etc). Easy travel already into central London, affordable property and when the tube goes out there the property prices will rise stupidly

Do a bit more research, BUT ... get on the ladder before you are priced out even further