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Should we buy a home in London or save for one in the north?

Virginia Wallis
Photograph: Chris Ison/PA

Q My fiance and I are looking to buy our first home. We are in our early to mid-30s and currently live in London. However, we are looking to move back up north in the next two years mainly to be nearer family and have a better chance at getting on the property ladder.

Due to an inheritance we are incredibly lucky to be able to put down a deposit of £100,000. But because our combined income is just short of £60,000 we are still priced out of a lot of Lewisham which is where we are currently based.

We’ve been told we should look for something in London as it’s important to get on to the property ladder but if we are planning to move in 2022 is it really worth it? Especially when trying to sell up, move north, get new jobs and switch our mortgage. Would we be better off trying to save more money to put towards a more affordable and long term, larger home in the north when we are settled and have been working long enough in a new job to qualify for a mortgage? Back in the north-east I expect our wages would remain fairly similar, or they could drop to a combined income of £45,000 to £50,000.

A Buying a home is not something to be taken lightly: it is expensive and the process of purchasing a property can be long and drawn-out. And as a rule of thumb, if you’re not planning to stay in the same place for at least two years – as you are not – you are probably better off carrying on renting. However, your suggestion of saving more money towards a house to settle in in the north-east is a good one. Waiting until you move north to buy also means that because you are under 40 and both potential first-time buyers you are both able to take advantage of the 25% government bonus paid on up to £4,000 of savings each year in a lifetime Isa. With this sort of Isa, you can’t get at your cash until the Isa has been open for 12 months and it has to be used for a first-time property purchase or to supplement income once you reach the age of 60. As you intend to buy somewhere outside London, the maximum purchase price limit of £450,000 on a property you buy with savings in the lifetime Isa is unlikely to pose a problem. And as you correctly point out, waiting until you leave London to buy a home is a lot less faff and means paying only one – rather than two – sets of legal fees.