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Original poster

To think buying a flat is the right idea

87 replies

Losttheattitude · 07/05/2024 11:45

Morning,
I have one DD, her dad passed away just after her 8th birthday, at the time we were living close to London in a big frankly disgustingly expensive house. My late DH did have life insurance which covered the remaining mortgage and left a little.
A year after he passed I got offered a job in rural North Yorkshire that I couldn’t pass, sold up the house and bought an equally lovely one for less than half the price!
All the remaining money was put into various investments for my DD. DD is now 19, she’s in her first year of uni in London. The money left from the house sale has gone to various things, a car, a gap year, uni fees etc.
DD wanted to stay in uni accommodation for her first year, easier to make friends. She loves it and loves London.
The money has been gathering interest the whole time so we now have over £750,000 (taking off the uni fees which are in our mind already “spent”).
Obviously it’s London so depending on where you look that could get anything from a 3 bed terrace with a garden to a studio flat!
DD has fallen in love with a one bedroom flat in a lovely area, close to central, its share of freehold, has a little balcony, but it’s £650,000. I decided to talk to my family about it.
My parents think the money should be going to a house, yes it won’t be central but it will have longevity.
My brother thinks I should put the money in a pension (half for me and half for DD). He doesn’t agree with “hand outs” and thinks DD should work for a house etc. like everyone else will have to.
Now I think I disagree with my brother, the only reason she is able to have this money is because her dad passed when she was young! I’m sure she would trade it all for her dad, and if he were still here we’d probably still be living near London with the mortgage just about paid off. She has dealt with anxiety, depression, an abusive ex. She got AAA in her A-levels and has worked her but off!! I also don’t view the money as mine, I took money out the pot for holidays etc. I’m mortgage free, have extra money to put into my pension every month and don’t stress about money at all.
I do see my parents point but I worry that a house further out would be more maintenance than DD would like and be a bit of dampener on the social life. I’m sure DD could just sell in a few years if she wanted that.
Does anyone have any insight that might make us change our mind before we go full steam ahead with this flat? AIBU to think the flat is the right idea? Should we be considering something else?

OP posts:
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NarrowGate · 07/05/2024 14:53

Have been your daughter, and my advice would be:

  • Stop asking family members for financial advice.

  • Look for share of freehold flats in period houses now divided up into two or three flats. People think this is a maintenance headache so these flats are much cheaper than the new build equivalent, but in fact it means that the costs of essential repairs are just shared out between you - there’s no third party management company taking a profit while doing needless redecorating every year. Plus you know the freeholders personally so there’s less likelihood of delays or disputes.

  • Look for two bedroom flats, or large one bedroom flats you could divide into two bedrooms later down the line.

I know only West London myself, but Shepherd’s Bush would give your DD what she wants within budget, and is only one tube spot outside Zone 1.

BoudiccaOfSuburbia · 07/05/2024 14:52

OP, the best flat is the one your Dd wants to live in, and can afford.

A share of freehold is great.

Avoid anything with cladding, lifts, service charges over which she would have no control.

And yes, Central London flats are expensive but she will be saving a huge lot each year in astronomical London rent.

BoudiccaOfSuburbia · 07/05/2024 14:49

BIossomtoes · 07/05/2024 12:50

Here you go. Just examples, there are plenty more.

https://www.rightmove.co.uk/properties/142762589 - not Paddington but very central

https://www.rightmove.co.uk/properties/86394189

https://www.rightmove.co.uk/properties/129882626

Massive service charges. Which can rise and rise.

LMMuffet · 07/05/2024 14:35

Of all property, the ones I think will hold value best are central London flats. There will always be demand for them, including rental income if she wants to come home to you for a bit after university. I don’t think there is much point going and living in the suburbs just to have a bigger place when you are just out of uni. Much better to be near work and stuff to do and in easy travelling distance of your friends.

I lived in Central London for approx 10 years in my 20 and 30s. It was brilliant. Depending on the area, £650k is a lot of money but not unusual for zone 1 - in fact in some areas it’s really good. Just watch out for lease length and service charge. And cladding, of course.

HugeCwtch · 07/05/2024 14:28

BIossomtoes · 07/05/2024 12:06

I don’t understand why your entire family has a say in what you do with your money. Frankly it’s none of their business. If, as you say, you’re financially secure and don’t need to add to your pension pot, why do it? A centrally located flat is the perfect solution for her, particularly if she intends working in London after graduation. It’s likely to be much lower maintenance than a house too.

This - its not your parents, or your brothers place to interfere

palrtien · 07/05/2024 14:26

We recently sold our 2 bed zone 1 London flat for around that price. It's not expensive for a good flat in a central location. Our flat was in a modern apartment block in a safe but busy central area. We lived there for 10 years and had no major maintenance issues and soundproofing was excellent. If we only needed one bedroom we could have rented out the second bedroom for a nice tax free profit. We were able to live within walking distance of work, and a fast (10 min) tube distance to nights out. I never experienced loneliness in central London at all. It will be full of other wealthy students who can afford to live centrally too. For UCL I'd consider Bloomsbury, Kings Cross, Fitzrovia. I wouldn't look further than a 20 min walk, it's nice to be a quick walk from work or study as that's where you have to get to during rush hour when public transport is at its worst.

Kesio · 07/05/2024 14:03

In that scenario, I'd happily let her get a flat in London for £650k. I think your brother needs to wind his neck in - you and your dd have suffered the tragic loss of your dh and having a flat bought outright is a good and permanent legacy for your dh to have been able to facilitate.

I wouldn't put it in pensions - presumably you have quite a big/expensive house that you might want to downsize in the future anyway.

I guess she just might need to be careful in the future if she got married and then divorced and lost half the flat in the process. My dh has a much older friend whose dd this did actually happen to. I have only seen pre-nups on TV, but it seems that in your case, it might be appropriate.

AlmostCutMyHairToday · 07/05/2024 14:02

I agree with others - 2 bed flat is the way to go. Easier to sell, and gives flexibility if she wants to rent the 2nd bedroom, or if she gets a partner then they may want some extra space.

If she's looking for lots of tennis courts, and good parks to run, not too far from UCL then Highgate / Archway would tick those boxes. Waterlow Park, Highgate Wood and Hampstead Heath are beautiful. And easy to get to happening areas on the northern line or bus (Angel / Kings Cross / Old Street / Camden, etc).

siameselife · 07/05/2024 14:02

I would like to emphasize the possibility of a trust to buy the flat.
We are in the states now so different legal system but we're strongly advised to set up trusts for dc as a safer way of giving them assets.

pinkdelight · 07/05/2024 13:59

parietal · 07/05/2024 13:50

2 bed flat in Camden or Kentish Town and she will be sorted. There are lots available for your budget

Oh yes, those are good spots too. But definitely for a 2 bed not 1.

parietal · 07/05/2024 13:50

2 bed flat in Camden or Kentish Town and she will be sorted. There are lots available for your budget

pinkdelight · 07/05/2024 13:47

If she just goes south of the river it gets cheaper and still nice areas like Shad Thames, London Bridge, Waterloo, Lambeth North, the cooler bits of Bermondsey near the river or even Battersea. I think getting a flat is a great idea but a one-bed for 650k is not so great and better to get a two bed (and potentially let the second room to a uni mate) for that price or a one-bed for less (should be able to get a decent one more like 450k).

BrassOlive · 07/05/2024 13:32

I would look from Gower St, up into King's Cross and Angel. That's the buzziest, most special part of the city in my view.

Spinet · 07/05/2024 13:23

Madcats · 07/05/2024 13:16

I don't think I would like to have lived by myself, aged 19. Part of the Uni experience for me was living in a grotty massive house with friends (there was always a buddy to go out with).

Would it be a better idea to have the flat as a "future home" for a couple of years and use the rental income to fund her accommodation.

I've seen a couple of threads on here/Facebook about students who end up hating being "the landlord" when friendships go wrong or a boyfriend/girlfriend moves in.

I agree. I don't think a London flat is financially a bad idea but it is really easy to get very lonely in Central London. You also need to think about who will be looking after it if she wants to travel or just move elsewhere non-permanently when she graduates. A flat could tie her down most annoyingly.

Madcats · 07/05/2024 13:16

I don't think I would like to have lived by myself, aged 19. Part of the Uni experience for me was living in a grotty massive house with friends (there was always a buddy to go out with).

Would it be a better idea to have the flat as a "future home" for a couple of years and use the rental income to fund her accommodation.

I've seen a couple of threads on here/Facebook about students who end up hating being "the landlord" when friendships go wrong or a boyfriend/girlfriend moves in.

AndiOliversGlasses · 07/05/2024 13:16

Oh also, worth digging deep into the archives of Kirstie & Phil shows to get a sense of what sort of compromises you might need to make and what sort of things are important to you when flat hunting. DH and I learned a lot about each other from watching and commenting on TV people’s house hunts, made it much easier when we came to do it ourselves.

AndiOliversGlasses · 07/05/2024 13:12

With flats, you really need to put the hours in viewing them, getting a feel for areas, styles of building, transport links, how it feels at night time. Fortunately as cash buyers the agents will be falling over themselves to show you things. Avoid Foxtons.

Lindy2 · 07/05/2024 13:12

A London flat should hold its value. When she needs more space then she can sell and buy something new. I'm guessing the flat could well be perfectly OK until there are children in her life and she needs more space. Seeing as she's just starting Uni then that could well be quite a few years away.

Don't put it in a pension for her. I'm sure your DD doesn't want to wait 40 years to be able to have the money. Her financial need is going to be greater now, not when she's 60+.

No mortgage now means greater capacity for savings when she starts work so savings and pensions for the future could be sorted during her working life. There's limits on tax efficient pension savings so a big payment now might actually take her over the limits by the time it's been invested 40 years.

Why is your brother so involved? His advice really isn't great.

This is money for you and your DD. Do what you feel is right for your needs.

I'm sorry for the loss you and your DD suffered. I'm sure your DH would want to see you both financially secure and be pleased your DD can have somewhere she loves to live without the financial burden.

CommentNow · 07/05/2024 13:12

I'd buy a 1 bed flat so that if she settles down into a relationship to have a baby, she will need to sell. It gives a clear break point to review finances and let her and a partner choose a home together.

Id also seek legal and/financial advice on protecting money and assets.

For example, a 50/50 joint tenancy together might mean that when you both sell the flat, she gets 50% which will be hers to put into a joint home with a partner as she sees fit and you can decide if or how to top it up. Perhaps you might want to then consider a three way tenancy to give you and DD a majority control with funds set aside to buy out her future partner if it went wrong. Lots to consider.

Stoufer · 07/05/2024 13:04

Yes definitely go for a two bed, may have to be marginally further away, but it means that she can have a lodger (which would bring in quite a lot per month, and I think is very tax effective with the ‘rent a room’ scheme, but you’d need to check this. Also two beds are a lot more versatile - you can start a family and not have to move straight away. I would definitely broaden your search area though, to look for something slightly better value. But definitely check what the service charge is, some flats near us have service charges that have trebled over the last year (from £2k per year to £6k per year), and as a result quite a few of them are now for sale.

AliceMcK · 07/05/2024 13:03

Absolutely the flat, she’s young and wants to enjoy her life. As you say it’s her money. She sounds sensible and doing well, let her do what she wants.

My only stipulation would be put it in a trust so no future boyfriends or partners get their hands on it.

UltimateFoole · 07/05/2024 13:02

I'd suggest Bloomsbury.