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bimlam

First Purchase This Summer In London?

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Hi everyone

I have been following HPC for about five years now. During that time I have saved up for a deposit to buy a house.

However, the money is also for me to go travelling for a year. To own my own house and to go round the world are my main two ambitions right now and I am close to realising them which is exciting.

My plan is to secure a 5 year fixed mortgage for under 5% (I have a 20% deposit) and buy a one bedroom house in zone 2 somewhere in London, rent this out for £1050 per month, which would cover the repayment mortgage, then in December quit my job and go travelling for a year. When I return I will find a job and assuming it pays enough for me to afford the repayments I will move into the house.

My only worry is that something might go wrong with the house and I will be out of the country. So if I rented it out via an agent that would mean they could look after it but then they would want a cut of the rent.

I want to buy soon in London because interest rates are still low and if I leave it until I get back from travelling I may not get a job which pays as high a salary as what I am on now, because I am lucky enough to be paid significantly higher than the industry average for what I do.

Most people I have discussed this with say it sounds logical, but they are not reading this website every day.

Any thoughts? Am I bonkers? Or does it sound logical?

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Hi everyone

I have been following HPC for about five years now. During that time I have saved up for a deposit to buy a house.

However, the money is also for me to go travelling for a year. To own my own house and to go round the world are my main two ambitions right now and I am close to realising them which is exciting.

My plan is to secure a 5 year fixed mortgage for under 5% (I have a 20% deposit) and buy a one bedroom house in zone 2 somewhere in London, rent this out for £1050 per month, which would cover the repayment mortgage, then in December quit my job and go travelling for a year. When I return I will find a job and assuming it pays enough for me to afford the repayments I will move into the house.

My only worry is that something might go wrong with the house and I will be out of the country. So if I rented it out via an agent that would mean they could look after it but then they would want a cut of the rent.

I want to buy soon in London because interest rates are still low and if I leave it until I get back from travelling I may not get a job which pays as high a salary as what I am on now, because I am lucky enough to be paid significantly higher than the industry average for what I do.

Most people I have discussed this with say it sounds logical, but they are not reading this website every day.

Any thoughts? Am I bonkers? Or does it sound logical?

Not enough information, but it sounds like:

(a) If you cannot afford an agent to manage the property whilst you are away, then you are cutting things fine and probably couldn't afford any repairs.

(B) You have a high paying job for your industry, and you want to give it away just as the economy is really turning sour?! :blink:

Sound like a bad idea to me.

Edited by Tiger Woods?

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Thanks for the replies, my worry is that interest rates will go up at some point and the London market is unlikely to go down in line with the rest of the UK. If I go travelling and come back and rates are significantly higher I will not be able to afford a mortgage for London and I will be locked out of the market all over again.

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Thanks for the replies, my worry is that interest rates will go up at some point and the London market is unlikely to go down in line with the rest of the UK. If I go travelling and come back and rates are significantly higher I will not be able to afford a mortgage for London and I will be locked out of the market all over again.

Houses in Zone 2 London have inelastic supply. As such, economic theory would predict that their price will be more volatile - going higher on the way up, and dropping further on the way down.

Its not clear to me that the London market is bullet proof.

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Any thoughts? Am I bonkers? Or does it sound logical?

You are going to go from a position of having a well paying job and lots of cash to a postion of having no job, very little cash and large mortgage to service.

That doesn't like a good idea at all.

House prices are not going to up in a big way anytime in the next five years.. i would suggest dropping the idea of the house and keeping a hold of that cash and buying something when you are settled back in your career, two or three years after your return.

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Enough already with the tired old mantra that London prices are somehow immune to falls....they just rise and fall in a different timeframe to other regions. Land Registry showed a 1% fall for Greater London last month in fact IIRC.

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(a) If you cannot afford an agent to manage the property whilst you are away, then you are cutting things fine and probably couldn't afford any repairs.

Note that that's not even an option. If you rent out a house, you MUST supply your tenants a UK address to which they can serve notices. That means either yourself or an agent authorised to act for you.

IANAL.

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Hi everyone

I have been following HPC for about five years now. During that time I have saved up for a deposit to buy a house.

However, the money is also for me to go travelling for a year. To own my own house and to go round the world are my main two ambitions right now and I am close to realising them which is exciting.

My plan is to secure a 5 year fixed mortgage for under 5% (I have a 20% deposit) and buy a one bedroom house in zone 2 somewhere in London, rent this out for £1050 per month, which would cover the repayment mortgage, then in December quit my job and go travelling for a year. When I return I will find a job and assuming it pays enough for me to afford the repayments I will move into the house.

My only worry is that something might go wrong with the house and I will be out of the country. So if I rented it out via an agent that would mean they could look after it but then they would want a cut of the rent.

I want to buy soon in London because interest rates are still low and if I leave it until I get back from travelling I may not get a job which pays as high a salary as what I am on now, because I am lucky enough to be paid significantly higher than the industry average for what I do.

Most people I have discussed this with say it sounds logical, but they are not reading this website every day.

Any thoughts? Am I bonkers? Or does it sound logical?

This might have worked well in 2003. Not in 2011. :lol::lol::lol:

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Almost everyone I know who took time out to travel the world didn't come back.

Keep the cash in case you find a nice house on a beach for sale...

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I've got to agree with the other guys. Keep the cash in the bank, and go traveling asap. Enjoy yourself. You've got the rest of your life to have a mammoth mortgage debt and the necessary job to pay it off

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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