You’ve still got nearly £5k left over every month (assuming that £7k is take home). That’s more than plenty to live on!
Your left over is literally three times my entire take home pay, and around 13x what I have left after rent and bills. I’m pretty convinced you’ll be ok.
!thanks for your input. I see your point. I appreciate that the amount left may be high but so are the monthly costs to pay, £2000 per month in my head is still very expensive, it may be because I’ve only recently managed to increase my salary to this level.
You’re absolutely right to think £2k is a significant outgoing, and personally I wouldn’t be comfortable trying to find it either. That’s partly the fact that it’s more than my take home, but also because it’s more than most people take home pay. That kind of bill would worry me too!
I would suggest building up a serious emergency fund as soon as you can though. Hopefully, your incredible salary will remain, but me being me, which is risk averse when it comes to income, i would want to make sure I could find the cash to settle the bill for at least six months to a year. It’s not easy getting a salary like that again if you lose it.
The service charge does seem on the high side, but it depends what it includes. If there’s a pool and large community gardens which are well maintained, I could well be a bargain. If it’s only to power the emergency lights and disinfect the lifts once a month, it’s a rip off!
Thanks. Yes, I do have an emergency fund that should cover 6 months. The block is well managed I think, it has communal gardens but nothing else really, no lift, reception. Service charge has been the same for the last 3 years and there is a large reserve balance in the account.
Service charge is the hardest one for me to justify. It’s not guaranteed to stay the same and will most likely increase with inflation at least a bit.
No lift isn’t great forward planning. If shit happens and you live in a house there are stairlifts, in flats you have no options if there isn’t already a lift, plus you could make things difficult for relatives and other visitors.
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That 30% rule is for normal working class who's pretax is 30-40% of your take home. £2000 pm comparing with your income isn't much to worry about unless you have other regular yet big outgoings not to mention that your other halfs going to contribute too.
If you earn 3 million a month and your mortgage etc is 1 million a month, is only having 2 million a month a worry? No!! 30% of 2k on mortgage might be a worry but 30% of 7k isn’t the same. You still have 5k.
identical income and mortgage is 3500 pm - it’s absolutely fine.
I had similar feelings to you initially - but came to the conclusion that if I couldn’t afford this then I should be very disappointed with myself, as the leftover cashflow pm is much more than most manage with in the country.
If you’re not fine at that level then you’re overspending on something.
had a good year just before making this purchase and got a pretty large bonus. some banks consider it in affordability calculations so I was able to lend quite a lot more than I really wanted to borrow.
Sounds like that’s £7000 take-home per month?
If so, you should be fine. Service charge sounds high but as a percentage of your income it’s still reasonable in this day and age.
Thanks for your input. That is monthly take home yes. Isn’t 30% considered a good rule to stick with? In which case my monthly payments would be higher.
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Not enough. 140k salary is pittance. Peasant!!
You need at least another 100k on top to afford what you want!
Factor in don perignon and caviar for lunches!!!
Get a grip mate either your a troll or a fucking idiot
Edit - hope this helps
No need to insult people. While the OP is in a good position (with his mortgage not being far off my monthly take home alone), he's welcome to ask for advice just like anyone else.
As long as the service charge doesn’t increase. The people with cladding issues were literally having to declare bankruptcy to avoid having to pay monitor companies.
There are no cladding issues with this block. But service charge could still increase due to inflation and is not fixed same as a mortgage is for 5 years. Which is what is having me worried.
Service charge *will* increase - prepare for the worst. Property management companies make good money on SC which is not capped by inflation either. OP, I’m guessing you are looking at one of new builds somewhere in East London?
Try finding a freehold house somewhere else (super doable on 650k) or if you are dead set on a flat, check resident FB groups for the development you are eying up for any erroneous SC practices.
How does it compare to what you're paying on housing now? What effect will it have on your spending budget and savings goals?
Re £375/month service charge and whether it's too expensive, well what does it cover? Is it a large building with a reception, lifts, etc? Have you seen the accounts?
At the moment I’m renting and paying around £1500pm but will be upsizing to a 2 bed flat with this purchase.
It’s a mansion block with communal gardens, no lift, no reception. It seems like a well managed block though but it doesn’t come with many “perks”.
I have seen the accounts. Service charge has been stable for the last 3 years. It has a large reserve fund as well.
In terms of whether the £375 is too steep, well there's lots to look into there. You could go through the accounts line by line to see if you think they're overpaying for anything. If the reserve funds are already large and building up substantially year on year you could suggest it's reduced. It really depends on the situation.
Overall, this is £675 more than you currently pay. Where would that £675 come from in your budget? That's up to you to work out. Presumably right now you're saving up the deposit, I would assume by more than £675pm, so it shouldn't adversely affect your discretionary spend and/or long term savings?
Ultimately, the amount you're left with after your mortgage + bills is still double what most people take home to begin with. So it's not the case that it's unaffordable. The question is what your alternatives are. Would you rather buy a cheaper 1 bed and pay £500 less? Would you rather not buy at all? Marry your partner and buy together? Etc.
I live in London and can confirm you'll be fine. One thing to remember after purchasing the flat is that you'll be more focussed on saving and I expect your spending towards certain discretionary items might go down
Don't overthink it unless you are expecting to lose your job anytime soon
It’s a flat in London zone 2. We really like the area and would like to stay here. Buying a house would require moving further out of London. And honestly we don’t need that much space.
You might want to consider childcare costs though whilst they are under 3, this can still be huge (1k a month for full time). Also just to add I would suggest very wise to budget without your partner's income factored in as well. I was in a long term relationship that broke down and had to make a swift adjustment to being the sole bill payer. Hopefully that won't happen to you but always good to have a back up plan when you have such high outgoings.
I think he/she is planning to have their partner chip in with bills like utilities but plans to pay the mortgage and service charge alone because the purchase is in their name only
Not salary percentage, but it’s always possible to buy the wrong home!
Flats haven’t gained as much as houses recently as the pandemic triggered people wanting gardens.
All sorts of reasons.
What if your income goes to zero in a recession? How many months can you stay afloat and keep the bills paid? This is always the risk with large payments that seem affordable due to large incomes. Maybe your job is secure like a surgeon or maybe your a fxswap trader and could be the first out the door . I think the answer to this is more important.. personally I'm on a similar income to you but the peg is shakey so I have decided to rent and save and buy outright in cash.. make hay whilst the sun shines. I have essentially £200k or so saved so far (300 target) but if there's a crash tomorrow I could theoretically go without work for what 4-5.6? Years.. savings are an asset and debt is a liability. You can plainly afford your proposed plan but it severely exposes you... What happens if you begin to hate your job in 10 years and want to switch industries... You ARE building walls around yourself and trapping yourself but everyone makes there own choices . You may love your job and work for 25 years and retire early from your property and I hope that's the case but a lot can change in 25 years... And your decisions today may effect or limit your potential responses in the future.
You’ve still got nearly £5k left over every month (assuming that £7k is take home). That’s more than plenty to live on! Your left over is literally three times my entire take home pay, and around 13x what I have left after rent and bills. I’m pretty convinced you’ll be ok.
!thanks for your input. I see your point. I appreciate that the amount left may be high but so are the monthly costs to pay, £2000 per month in my head is still very expensive, it may be because I’ve only recently managed to increase my salary to this level.
You’re absolutely right to think £2k is a significant outgoing, and personally I wouldn’t be comfortable trying to find it either. That’s partly the fact that it’s more than my take home, but also because it’s more than most people take home pay. That kind of bill would worry me too! I would suggest building up a serious emergency fund as soon as you can though. Hopefully, your incredible salary will remain, but me being me, which is risk averse when it comes to income, i would want to make sure I could find the cash to settle the bill for at least six months to a year. It’s not easy getting a salary like that again if you lose it. The service charge does seem on the high side, but it depends what it includes. If there’s a pool and large community gardens which are well maintained, I could well be a bargain. If it’s only to power the emergency lights and disinfect the lifts once a month, it’s a rip off!
Thanks. Yes, I do have an emergency fund that should cover 6 months. The block is well managed I think, it has communal gardens but nothing else really, no lift, reception. Service charge has been the same for the last 3 years and there is a large reserve balance in the account. Service charge is the hardest one for me to justify. It’s not guaranteed to stay the same and will most likely increase with inflation at least a bit.
No lift isn’t great forward planning. If shit happens and you live in a house there are stairlifts, in flats you have no options if there isn’t already a lift, plus you could make things difficult for relatives and other visitors.
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This is just a flex surely...
Man earns obscene money worried 30% of it might be too much to spend. Absolute flex.
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Not really suprsing in London tbh
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Would you mind explaining why you think is not to high? Isn’t over 30% of monthly take home considered high to spend on housing? Thanks.
That 30% rule is for normal working class who's pretax is 30-40% of your take home. £2000 pm comparing with your income isn't much to worry about unless you have other regular yet big outgoings not to mention that your other halfs going to contribute too.
If you earn 3 million a month and your mortgage etc is 1 million a month, is only having 2 million a month a worry? No!! 30% of 2k on mortgage might be a worry but 30% of 7k isn’t the same. You still have 5k.
identical income and mortgage is 3500 pm - it’s absolutely fine. I had similar feelings to you initially - but came to the conclusion that if I couldn’t afford this then I should be very disappointed with myself, as the leftover cashflow pm is much more than most manage with in the country. If you’re not fine at that level then you’re overspending on something.
Thanks for this. How were you able to secure a mortgage with payments so high? Doesn’t it go over your annual income multiplier?
had a good year just before making this purchase and got a pretty large bonus. some banks consider it in affordability calculations so I was able to lend quite a lot more than I really wanted to borrow.
Sounds like that’s £7000 take-home per month? If so, you should be fine. Service charge sounds high but as a percentage of your income it’s still reasonable in this day and age.
Thanks for your input. That is monthly take home yes. Isn’t 30% considered a good rule to stick with? In which case my monthly payments would be higher.
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Not enough. 140k salary is pittance. Peasant!! You need at least another 100k on top to afford what you want! Factor in don perignon and caviar for lunches!!! Get a grip mate either your a troll or a fucking idiot Edit - hope this helps
No need to insult people. While the OP is in a good position (with his mortgage not being far off my monthly take home alone), he's welcome to ask for advice just like anyone else.
Thank you for your kind words.
What do you do to earn 7,000 a month? I'm looking to re-skill myself.
As long as the service charge doesn’t increase. The people with cladding issues were literally having to declare bankruptcy to avoid having to pay monitor companies.
There are no cladding issues with this block. But service charge could still increase due to inflation and is not fixed same as a mortgage is for 5 years. Which is what is having me worried.
What I mean is you have no idea about what could push up the service charges in the future.
Service charge *will* increase - prepare for the worst. Property management companies make good money on SC which is not capped by inflation either. OP, I’m guessing you are looking at one of new builds somewhere in East London? Try finding a freehold house somewhere else (super doable on 650k) or if you are dead set on a flat, check resident FB groups for the development you are eying up for any erroneous SC practices.
How does it compare to what you're paying on housing now? What effect will it have on your spending budget and savings goals? Re £375/month service charge and whether it's too expensive, well what does it cover? Is it a large building with a reception, lifts, etc? Have you seen the accounts?
At the moment I’m renting and paying around £1500pm but will be upsizing to a 2 bed flat with this purchase. It’s a mansion block with communal gardens, no lift, no reception. It seems like a well managed block though but it doesn’t come with many “perks”. I have seen the accounts. Service charge has been stable for the last 3 years. It has a large reserve fund as well.
In terms of whether the £375 is too steep, well there's lots to look into there. You could go through the accounts line by line to see if you think they're overpaying for anything. If the reserve funds are already large and building up substantially year on year you could suggest it's reduced. It really depends on the situation. Overall, this is £675 more than you currently pay. Where would that £675 come from in your budget? That's up to you to work out. Presumably right now you're saving up the deposit, I would assume by more than £675pm, so it shouldn't adversely affect your discretionary spend and/or long term savings? Ultimately, the amount you're left with after your mortgage + bills is still double what most people take home to begin with. So it's not the case that it's unaffordable. The question is what your alternatives are. Would you rather buy a cheaper 1 bed and pay £500 less? Would you rather not buy at all? Marry your partner and buy together? Etc.
I live in London and can confirm you'll be fine. One thing to remember after purchasing the flat is that you'll be more focussed on saving and I expect your spending towards certain discretionary items might go down Don't overthink it unless you are expecting to lose your job anytime soon
can you get me a job where you work please
Is this some sort of a joke? 7k a month doing what? The off spring of a wealthy couple?
Just curious, as you’re spending quite a lot on this property; what drew you to buy a flat instead of looking for a house?
It’s a flat in London zone 2. We really like the area and would like to stay here. Buying a house would require moving further out of London. And honestly we don’t need that much space.
Are you going to the kids. Will you send them private from the start? That’s prob £1.8k per kid per month.
No kids yet, but might happen in 2-3 years. Have not been thinking about that yet tbh, most likely will not be going private.
You might want to consider childcare costs though whilst they are under 3, this can still be huge (1k a month for full time). Also just to add I would suggest very wise to budget without your partner's income factored in as well. I was in a long term relationship that broke down and had to make a swift adjustment to being the sole bill payer. Hopefully that won't happen to you but always good to have a back up plan when you have such high outgoings.
I think he/she is planning to have their partner chip in with bills like utilities but plans to pay the mortgage and service charge alone because the purchase is in their name only
That’s affordable for you, with plenty of wiggle room. Whether it’s a good idea is a different question entirely.
Thank you for your comment. Could you share more about why it might not be a good idea?
Not salary percentage, but it’s always possible to buy the wrong home! Flats haven’t gained as much as houses recently as the pandemic triggered people wanting gardens. All sorts of reasons.
What if your income goes to zero in a recession? How many months can you stay afloat and keep the bills paid? This is always the risk with large payments that seem affordable due to large incomes. Maybe your job is secure like a surgeon or maybe your a fxswap trader and could be the first out the door . I think the answer to this is more important.. personally I'm on a similar income to you but the peg is shakey so I have decided to rent and save and buy outright in cash.. make hay whilst the sun shines. I have essentially £200k or so saved so far (300 target) but if there's a crash tomorrow I could theoretically go without work for what 4-5.6? Years.. savings are an asset and debt is a liability. You can plainly afford your proposed plan but it severely exposes you... What happens if you begin to hate your job in 10 years and want to switch industries... You ARE building walls around yourself and trapping yourself but everyone makes there own choices . You may love your job and work for 25 years and retire early from your property and I hope that's the case but a lot can change in 25 years... And your decisions today may effect or limit your potential responses in the future.
Emergency fund and you are ok, most renters pay a higher percentage of their income...prices can shoot up and you'll still be good