Inspired by... Mortgages - "Inside London or Outside London"

--- My Inspiration ---

Looking for a house I can afford, and a mortgage to afford it with. It's not fun. But you have to do the research. Turns out there are some really good sources. Money Saving Expert's new mortgage calculator at https://www.moneysavingexpert.com/mortgages/best-buys/ is one, and the articles on http://www.charcol.co.uk are another.

One article in particular (http://www.charcol.co.uk/knowledge-resources/mortgages-and-me/article/escaping-the-london-doughnut-13575/) made interesting reading for me as it compared the idea and costs of buying outside of London against those of buying inside London. This is an idea I am trying to understand because it is not as obvious as it first seems. The general proposition is that London is expensive and outside London is cheaper, but a lot of it hinges on "averages", a metric which can be very misleading. So I wrote down some thoughts here and added them to the comments on the article.



--- My Thoughts ---

As a first time buyer comparing options both inside and outside London, I think the argument made in the article is academically true and well made, but in reality it is somewhat flawed. 

---- Average house prices - bad metric? -----
One the accepted truths about living in a city is the "living in a box" scenario. We accept the reality of the lack of space. But I don't know anyone who wouldn't choose a slightly bigger property when looking outside London. Even if you get more square metres per pound outside London the idea that someone who could live with a 524k mortgage repayments in London is only going to take around 55% of that for a property outside seems unlikely. More likely that they will see 524k as the budget. Being smart they will try to reduce it but not down so low as to allow the average inside London to be compared with the average outside, because if this is a home, and a one-off investment, would you not want the best living space you can get? More likely you are going to spend 70% to 80% of the budget, still saving some but no where near as much.

----- Long term cash or short term cash? -----
If you have the deposit for a 524k mortgage, then you have got an even bigger deposit for the outside London mortgage. It would seem wise to use what you can in the deposit to reduce the total amount that you will have had to shell out by the end of the mortgage but that means making way less savings than suggested in the article.

----- Train fares in the UK are expensive -----
The best way to save money on train fares is the 12 month season ticket. But that requires a hefty payment once a year. In fact twice a year if you are buying with your partner and both of you work in London. It may in fact be enough to rule out living in certain commuter towns. Alternatively you could reduce the deposit and bank some cash for this purpose, or you could rein in the property value. But then what's the point of going outside London and losing all its events and activities if you can't have a better property outside of London? 

I think the calculations are not as far apart as they first appear.