Save proceeds of house sale for 2 years or buy new flat now?

[metoo22]

I will be so grateful for any advice from MNers with experience or opinions on this.

I'm separating from stbxh and we have nearly sold our house (London). Splitting the proceeds 50/50.

I am going to rent near ds's school for the next 2 years as this will make his life much easier at this difficult time.

I plan to buy a flat for myself, and for 3 dcs to come home to in holidays(2 at university). This will be in London but not in the area I'm renting in. But what I can't get my head round is whether to buy now and rent out - will it be worth the hassle of getting furniture, sorting tenancy agreements, insurance etc for 2 years?) or saving / investing my £350,000 ish for 2 years?

If I buy now and rent out this would contribute towards my rent, which is super high (most of my salary). But would there be enough of a return over 2 years to make this worth while?

If I save it, can I get high enough interest to at least contribute to my rent?
I am not a natural risk taker and this last couple of years has been really hard in many ways so I don't want to give myself a lot of hassle.

I do plan to go to an IFA but would really appreciate suggestions and views - what do you think?

[specialsubject]

buy it now IMHO. There is NOWHERE that you can save it that will get near real inflation (which is not zero).

you do need to look into all the costs and hassle of being a landlord, and protect yourself with all the right insurances.

and I'll stop there because it seems that Mumsnet rules are now that making money by renting out property is completely immoral. Head for landlordzone or propertytribes for intelligent adults.

[Zipitydooda]

Buy now and rent out otherwise you might be priced out of the market by the time you want to buy.
Happened to my brother and he's now not able to buy a family sized place in London at all.

[ThreadKilla]

Buy now, it's supply and demand in London, population is only growing! agree with pp you'll probably be priced out in 2 years! Where we are in London £350k might just get a 1 bed!!
Being a landlord isn't that much hassle! references & deposits can be done online but that's another thread & looks I better not go there!!

Good luck OP!

[metoo22]

Thank you all for that! Looks like I need to be brave.

[whattodoforthebest2]

Putting your money back into property is a safer bet than putting it anywhere where the returns could be higher in the short-term. Interest rates in savings accounts are rubbish at present.

Bear in mind that if you rent out to start with, you'll need a reasonable timescale to regain possession of the property when you want to move in - it could take several months, so be prepared to wait for it to be vacant.

[metoo22]

so I've been doing a bit of reading this evening about tax and insurance and letting agencies. I think I might find it all a bit stressful but at least I would know I had somewhere to live once I leave the rental and dcs are all hopefully working or at univ. Do any of you have experience of buy to let mortgages? Theoretically I could buy a small place outright now but a friend said I shd have a mortgage for part of it to claim payments against tax?
Really my aim is to know I have somewhere to live, but thanks for the reminder about timescales what todo.
Special I will check out those sites.
Zipity that's what I realised, would be awful if prices rise massively and I can't afford anywhere in 2 years time.
Thread, good to hear you say it's not too much hassle though I remain sceptical! Thanks again all.

[specialsubject]

be aware that the political parties blame all the country's problems on landlords (as do many on mumsnet). One thing that may go soon is the tax break on BTL mortgages - TBH as a landlord I do agree with that as it does seem unfair.

so do your sums thoroughly.

beyond that, as being a landlord is now classed as immoral by many on here, head for landlordzone or propertytribes for advice without bile. They encourage good practice.

[metoo22]

I do want to buy somewhere now, as I'll need somewhere to live myself in 2 or 3 years. But I just wonder whether it'll be financially pointless for such a short period? But at least I'd have a place ready to live in.

[scottpinkston]

It is good time to buy now as it would give you good returns in future. I was also in similar dilemma but then took guidance from www.mwfloridalaw.com and invested in a household property.

[Babymamamama]

Agree with all the pps. Buy now. At least in London demand seems to just grow and grow. You know now what your money will buy you. Prices could move up in two years beyond your reach and that would be galling.

[felkov]

I would buy now. I bought a flat (in zone 4) 3 yrs ago and recently sold it for 20% more than I paid. No other investment gives you that return at the moment and 2 years is a long time in London.

being a landlord is relatively straightforward but do your homework on the costs e.g. management fees and the tax implications

[metoo22]

Thing is I'm not looking for returns long term and don't plan to sell. I need some income for a couple of years then somewhere to live myself. Thanks for all your (unanimous!) opinions

[felkov]

I think they key point everyone has made is that if you buy now you know what you can get for your money.

if you invested that same money elsewhere you are then playing a guessing game for 2 years of how much your investment grows compared to how the property market changes.

Good luck with it all!

[metoo22]

Yes I'm sure you are all right! I appreciate you all taking time to write. Ds and I move out of family home and into rented flat this week so once we are a bit settled I will get on with it. I already casually browse zoopla etc.