Q. I have a budget of £300,000 to buy my first property and want to buy something that’s not only a home for at least the next five years but will also have a decent capital growth. The question is do I buy a house, which is affordable if I buy just outside London or do I go for a one bedroom apartment in Canary Wharf which is all my budget will buy me if I decide to stay in town? Which do you think will give me more capital growth in five years to allow me to trade up to something suitable for longer term?

A. There is always some kind of trade off when making a decision where your heart and head will naturally conflict. Your heart will naturally say buy the house because of course it will offer you the white picket fence dream everyone longs for and the space and the location somewhere green and pretty. But if your top priority thinking with your head now and not your heart is capital appreciation then it has to be the one bedroom in Canary Wharf. Historically, growth in a city is always much higher than on the outskirts. The very fact that you can buy a house for the same price as a one bedroom apartment in town proves that very point. The infrastructure and convenience of everything in town pushes prices up as accessibility becomes everything, and people are willing to pay more for property in town simply because they don’t have to contend with a long commute every day and they have everything on their door step, whereas going out a bit further buys you the space but loses you the convenience. Naturally the demand for central properties is so much higher which in turn guarantees a much higher capital appreciation. If you want to make your money work for you and you feel you can cope with less space then go buy the one bedroom flat, as long as you buy clever, remember buy the worst apartment on the best road (location, location, location) not the other way round to optimise your return in five years’ time.