Aib ungrateful?

[Changemymindchangemylife]

I am about to move to London to start a grad scheme. Have found some friends to live with and will be renting a houseshare as part of my salary. Was really thrilled earlier today when I found friends to share with and called my mum to share the news.

She criticised the decision a bit as she has very kindly saved a sizeable amount of money which she wants me to use as a deposit for a property. It is quite a lot of money and of course is only going down in value as the housing market in London rises. She is understandably anxious for me to get on the market.

Thing is, while I'm very grateful, I don't think she understands London is so expensive these days that I can't really buy somewhere just like that. Her logic is that I should just move further out.

I don't know! I feel ungrateful but I got a bit angry and upset that she wasn't feeling pleased for me at having sorted things myself. It's a long hours graduate job that I don't want to mess up and I don't feel like living far away will be beneficial for me. I also think I might as well live with friends while I'm in my early 20s as soon that won't be an option. She sees it as throwing money down the drain...

WIBU?

[Changemymindchangemylife]

Also, can anyone advise me what they would do? The money is about £200k. Perhaps I should buy elsewhere and rent.

[Pinkheart5915]

I brought my first flat at 19 with the money my parents gave.

With the position you are in I think it would be silly to rent ( it is throwing money away) even more so if you want to buy in London property prices will just keep going up in the future

[BenguinsMummy]

studying or working in London doesn't necessarily man you need to live in London Hun, there are good rail links from Sussex via the Victoria line and also other areas such as Surrey.... Reachable via overground and some underground links, not to forget Essex.... I've never liked to live where I worked, hence my last job being half hours train commute to another city.... I'd honestly take your mums advice and invest the 200k into a good property, this will ensure you a good financial footing later in life and will eventually grow in value when the market recovers.... I know your 20's feels like time for fun and not really caring too much about the future, but my 30's crept up on me fast....

[Changemymindchangemylife]

Ah ok, interesting advice, thanks! So you'd suggest I buy with it?

[FasterThanASnakeAndAMongoose]

I'd invest it in property asap.

[Pinkheart5915]

Yes I'd say buy with it, you won't regret it in the future

[YumBountyChoc]

Could you buy a property and rent it out and still rent yourself? That way you've still got a property to move into if necessary. 200k is a good deposit even in london.

[AWaspOnAWindowInAHeatwave]

Congratulations on your new job and flat share OP.

I'm going against the grain here and I'll say I agree with you.

I understand what other posters are saying re it being silly to rent, but where in inner London are you going to find a decent property for £200k? You'll probably struggle to get a mortgage to upgrade to something you actually like, if you're on a new graduate salary and you're only just starting your job now. Living in any city can be expensive, especially London, and if you're not used to having to budget, why saddle yourself with a property and all the related expenses from day one?

So i'd say rent for now, or perhaps your mum could buy a place and rent it to you and a couple of others (so in effect still a flatshare) for a couple of years, so you can still live a reasonable distance from work but you won't be dealing with bills/council tax/repairs etc entirely on your own just yet. When you're more settled and you're happier to commit, then perhaps you can look to buy something (or but your property from her for £200k less than the market value)?

[Acornacorn]

I'd enjoy living in London living with friends. It's what your 20s are for.
Your mum is right but sometimes the sensible option isn't the right one when you're young.
I bought my first house at 21. Wish I hadn't. My 20s would have been much more fun.
If you could invest in a property elsewhere and rent it out, do that.

[Marmalade85]

Do you mean you have £200k in cash or a £20k deposit for a £200k property?

[Inertia]

A mortgage provider will probably want to see evidence of several months' salary before lending, so you might need to get yourself established on the graduate scheme first.

[blowmybarnacles]

£200k -for real ?

[Changemymindchangemylife]

I mean £200k in cash yeah, I am very grateful for this. Id imagine there a lot of extra costs associated with buying a house though, stamp duty and the like?

[VimFuego101]

Presumably you won't get a mortgage when you've only just started a new job, so I would continue with your plan to rent for a year, work out where you want to buy and make sure your credit is squeaky clean ready to apply for a mortgage a year from now.

[HeddaGarbled]

I think the house share is the right move at the moment. Buying way out on your own, there's a risk you could be socially isolated as well as all the hassle of travelling, which in London is a real hassle.

Sharing at your age is so much more fun and sociable plus being central will be a big plus.

£200k is a massive deposit and once you are earning and can get a mortgage will set you up nicely. Don't panic about getting on the market at your age. It's overheated at the moment anyway and could well crash in the future.

[Atthebottomofthegarden]

Yes there will be purchase costs, and if you buy to let the stamp duty rate is higher than if you are buying somewhere to live.

I think if I were you I'd stick to your plan to house share for at least 6 months - 1 year. £200k is not going to get you much by itself in London or a commutable spot, so you will need a mortgage too to get a nice flat. You won't get that straight away when you start a new job.

Tell your Mum you are weighing up your options and different areas and will look to buy in a year or so. Note that prices are at their highest in spring. They've just come down a bit now (everyone who hasn't sold has reduced the price) and are unlikely to go up much between now and the end of the year.

At least you have options if your housemates drive you nuts!

[teraculum29]

I would say that London is so expensive that £200 is not enough even for studio flat.

If I were you I would wait until my job situation is secured enough and also my credit score is nice and high so then I could get a decent mortgage.

[teraculum29]

• £200k

[ArsMamatoria]

Why not buy somewhere further out and let it for a while?

[ArsMamatoria]

You could buy somewhere in Reading, for example. Places on the Crossrail route will almost certainly go up in value and you could then use the profit to buy somewhere else once you're more settled.

[MovingOnUpMovingOnOut]

I think you would be wrong to tie yourself down just yet. Does your graduate scheme offer the possibility of overseas work or travel? Because at this stage in your career you need to be very flexible and take a few chances. Do you want to be worrying about maintaining the boiler and sorting insurance while you're on secondment to the Sydney or Manchester office or wherever? If you share you'll be a landlord and that's never easy.

Also don't underestimate the support network you will need as a graduate trainee, particularly if you're not from London, so that sharing arrangement could have even more benefits.

£200k is a lot of money. It will still be a lot of money when you decide to settle down and buy a property. You might need a small mortgage or to compromise but that's all to be expected and you will still have considerable advantage over those who do not have £200k from a parent.

[SarahAnderson]

well for a start, wait until after the referendum -- house prices may well crash if we Brexit!

[whattodowiththepoo]

Buy and rent it out.

[Italiangreyhound]

I would speak to my mum about buying a property and renting it out, find a suitable area where you know it will be easy to rent, not too far from where you are so you can move into if you want to or have to. You make an effort to sort the details out and maybe decorate a bit etc.

Then live your fun life in the big city. After a few months or a couple of years my guess is you will be sick of dirty dishes in the sink and unexpected overnight guests and will be delighted to move into your 'home'.

You do sound very ungrateful but of course it is your life and you could do as you wish.
(PS you will be hopping mad if you mum decides to go on a series of cruises and spends the 200K or even worse is ill and needs that money for her care and you end up with no house but you do have the right to refuse.......)