I'm a solo FTB 23M, with a annual salary of around 50k including bonuses and currently living in Manchester City Centre in a flat with £1100 per month rent. Work is in the city centre so I currently don't own a car and don't plan to buy one for the next 3 years atleast (Already have a license tho).
I'm currently evaluating the 2 options strictly on financial facts and on what would make more sense financially. I will be planning to live in both places for about 5-10 years. And both options will be funded by a 31k deposit. Here are the 2 options:
- £200k, 2 bed flat in Manchester city centre (building across from where I am currently)
- 30 year mortgage at 4.41% for 5 years ~£847 a month
- Full mortgage repay ~ £305,015
- Just over 100 year lease (would plan to extend before selling)
- £310 per month service charge (Building management has a good record of not drastically increasing, called Block living)
- £250 per year ground rent
- Option to rent a car space for about £110 per month in the building
- Council tax band D ~ £144 per month
- Total per month ~ £1322 (not including car space)
- 3 bed leasehold house in Salford (new build 5ish years ago)
- 40 year mortgage at 4.41% for 5 years ~ £1200 per month (using FTB boost at 5.5x salary)
- Full mortgage repay ~ £573,005
- 240 years left on lease
- Annual service charge of £57.20
- Peppercorn ground rent
- Council tax band A ~ £108
- Would need a bus pass ~£80 per month
- Total per month ~ £1393
Wondering which one people would choose strictly on financial facts. Although the general sense I get from people online is to go for the house because no service charge, if I am strictly deciding between the 2 options above, assuming everything stays the same, the interest saved from going on a 30 year repayment plan on a cheaper property over the 40 year more than outweighs the negative of going with the flat. Also a house you would need to fix yourself while a flat is maintained via the service charge.
What do you think?