I’m looking at buying a one-bed flat for £160,000 at 25 – but should I rent instead?

In our bi-weekly series, readers can email in with any questions about property to be answered by our expert, Jonathan Rolande. Jonathan is a professional property-buyer and housing commentator who has bought and sold over 1,000 properties. If you have a question for him, email us at money@theipaper.com. Question: I am a 25-year old buying a one-bed flat in Manchester – or considering it at least. I have a budget of around £160,000, which seems enough to buy but to be honest I’m wondering about buying somewhere bigger when I can afford it and renting until then. Prices for one-beds seem to be falling and I’m wondering whether it’s really worth it? Do they get you on the property ladder and help you limb up like they used to. Answer: You’re certainly asking the right question at the right age. The property market is quite challenging at the moment and buyers can no longer rely on capital growth to come to the rescue if there is a misstep. Shorts Flats often make great homes but frankly, they make me nervous. In June, Zoopla went through 30 years of its data and found the gap between houses and flats has never been wider. Since 2016, the average house is up 43 per cent and the average flat just 10 per cent. In the North West the average flat sells for £120,000 and the average house for £273,000. Five years of owning a flat could leave you no closer to the house you want. Office for National Statistics (ONS) figures put the city’s average flat price down 2 per cent in the year to May 2026, while semis rose 2.5 per cent. Reports in July state that values in parts of the city centre have fallen by about £74,000 in two years, with leaseholders dealing with cladding work and service charge demands. Service charges are the cost people forget to budget for. Hamptons puts the average at £2,405 a year, up 32.6 per cent in five years. A house also needs maintenance but there is far more control on timing and costs, you can even do work yourself, which is impossible with a flat. The difficulty I worry most about is the exit. Buying and selling costs close to £6,000, or 4 per cent, which prices must rise by before you break even. When you’re a first-time buyer, you get a reduced level of stamp duty land tax (SDLT) – the tax you get charged on a home. At £160,000 it saves you £700. The crucial thing though is you can only use that relief once. Buy a £280,000 terrace five years later and the SDLT is £4,000, having lost the advantage you had (if stamp duty is not reformed by then). Leapfrogging a flat and buying a house could make sense if you can afford it now. A small freehold terrace with no lease, no service charge and more value from SDLT relief is the way I’d go. If that doesn’t feel right, another year of saving is not a bad option all the time prices are stagnating. And don’t forget, if you are looking at flats, the main questions are: what is the service charge as a percentage of the price? What is in the reserve fund? Is the fire safety paperwork up to date? How long is left to run on the lease? At 25 you have time. You are still nine years younger than the average first time buyer! EXPLORE MORE ON THE TOPICS IN THIS STORY