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?

Wait until you're settled in your job and know where you want to live. I suspect it won't buy you a whole house in London, so you may need a mortgage - for which you'll need to have had your job a while.

Don't rush into the decision as you may regret it. There's nothing wrong with waiting a little while longer.

Wow, from your initial post I was assuming something like £50k (which would still be very generous), not £200. That is enough to get you on the ladder somewhere on the outskirts of London, it really depends where you are working as to what area is good. Buy for sure... but not quite yet.

Go for your flat share, have a great time. Enjoy the life you've set up for yourself. But whilst you are doing that start to suss out areas, see where the transport links to your job are decent, where do other people that work there live and what do they like about it? Where may you want to work if you move on from the company you're working at/transfer within the company. You'll never really know what the future holds but a year is long enough to suss a lot out. You may find by then you are sick of fighting over the bathroom and sharing a kitchen! You'll also be out of any job probation period so a better risk for mortgage lenders.

I'm also going to go against the grain of the replies and say please dont buy to let. Its a long term, not a short term option. You'd still have the hassle of sorting out a broken boiler if it happens but then your money is tied up when you do want to buy. Yes you can sell it but with stamp duty/lawyers/agents fees you'd only make money if it's gone up a lot in value, gives you less flexibility when buying (it's a bonus to be chain free). Also you'd get taxed on any rental income you get.

It would take you a while to find and then buy somewhere anyway so you can take up the houseshare and have a look for a place over the next few months. £200k is possible in some areas of London (I just sold up near the northern line in Morden), stamp duty and legal fees being the main additional costs. You'd have to furnish but can be done cheaply with Ikea, gumtree, frecycle etc.

Personally id buy.

Is there anyway yiu could buy and let it out and rent in London with the money whilst you complete the grad training?

I would buy ASAP. But I wouldn't definitely live in it.

I can see the up sides (and down) of living with friends. But if you are planning on staying in London I would suggest getting on the ladder ASAP. When you have a few wages behind you and renting it out.

Lucky you!

Personally agree with those saying take the house share and spend the next 6-12 months finding your feet in London and working out where you want to buy and what sort of place you want to buy, what sort of mortgage you can and want to take on.

No way should you buy a flat 'outside' of London before you've had a chance to live in London.

Your mum has given you an amazing opportunity to buy something - it's worth taking the time to make sure you get it right.

My mum would never hand over such a large sum of money unless it was to invest into a property, and understandably so. Can she not hold onto the money until you are ready to buy or invest it herself into a property which can be sold when you're ready?

I only think YABU if you are still expecting the money even though you don't wish to buy somewhere now. If you are happy to not have the money until you're ready then YANBU.

Don't rush into buying somewhere... Maybe you/your mum could buy somewhere and rent it out in the short term if she's worried about you losing out? Move in with your friends and enjoy yourself for a couple of years

Also, if it's a law/finance/accounting type grad scheme you are likely to have done very very long hours. Trains only run so late, and you don't want to have to taxi home to say mid Essex at 2am. (Voice of bitter experience and that was only zone 6)

What a lovely gift OP. I'm not sure you mum understands though that you wouldn't get a mortgage yet until you have been earning for a while. How long is your probation period? And are you guaranteed a job at the end of the grad scheme?

I'd have an honest chat with your mum about the realities and get a rough timetable for when you think it would be feasible.

When we bought our first house it took over a year from starting to look to moving in. With our second we were much more disciplined (and knew exactly what we were looking for) but it still took 8 months. Accept, spend a few months in your flat share getting to know London and then start looking. It might take a while to find somewhere and you won't really know your requirements until you've been working in London for a while. You need to take your time because a home is a long term purchase so it's important to get it right in terms of location and type of property. Explain this to your mum and give yourself a year to find somewhere. Better to lose a bit of the cash if the market moves, say, 10-20% than shell out fees, stamp duty etc on a house that proves unsuitable in a year's time and then have to find all those costs again to move.

Also, point about Brexit is a good one. If we vote to leave I wouldn't be buying property in a hurry.

Congrats on the new job.

Firstly, the London market and the just-outside-London-market are two quite different things.
And while £200k is a lot of money, it won't get you anything in London, and will get you something quite modest (1bed flat) in one of the commuter towns.
But prices aren't shooting up, so please don't feel you have to rush into something to stop the money devaluing...

Even the London flat market has slowed massively since the new buy to let stamp duty rules came in, so I'm not sure you'll be any worse off if you wait 6 months.

It might be worth putting your salary into a mortgage calculator and seeing what a bank would lend you. £400k will buy a 2 bed flat in a decent area, so you can flatshare by renting a room out. Might be something to aim for in a year when you've passed your probation period and got enough of a feel for London to know which area you would want to be in?

I would use the £200k to put down a substantial deposit on a flat in zone 2 or 3 and get a mortgage. But wait until post EU.
I'd then rent the flat out and do the flat share.

I will give you then benefit of my DD’s experience. She didn’t have money to buy anywhere but it is still relevant. I assume your money is not enough for central London so you would need to buy out with London and travel?

DD got a job in Notting Hill area. She moved in with her boyfriend who lived south of Lindon and began the commute. For 6 months she traveled daily. Bus to station, over an hour on the train, bus/tube to work. This took around 2 hours each way. She was tired and miserable. She could have no life and couldn’t socialise with her new work mates. She also had no money as her rent plus the travel was very expensive. It all came to a head when she and her boyfriend broke up

She now rents a room in a flat in Willesden Green with two others. She can walk to work form her flat, she gets home at a reasonable hour, she has joined a gym and has a fantastic time socialising with her colleagues and flatmates. She is like a different person and is really enjoying living in London. She reckons living out of London and traveling is great if you have kids etc and want a house/garden/schools etc etc but it is not for a single sociable person.

I can’t advise you. You have to do what is right for you, but maybe rent in London for a while? Get to know the area you are working in, work out what you want, make friends and have fun for a while. Save the money your mum has given you for a future house purchase?

I would wait until you have found your feet in London.
I moved to a new city and did a house share for only 3 months whilst I looked, but made life long friends living with a group my age.
It will be easier to look once you are there.
Hopefully your mum has the money earning some interest.

I'd bite my parents arm off for 200k, I'd invest in property absolutely.

Stick to the flat share for now, and use the time to find your way round London, which areas you like and don't like, what facilities are important to you, what things you like doing and seeing - and then you can buy when you know where you want to be.

I'd use the £200k as a deposit and then rent rooms out to your mates?

Tell her you've only sorted the house share whilst you look for something to buy - after brexit/bremain.

Tell her you don't want to make a bad decision so want to get to know areas and find out where you can make a good investment together.

You should have about £350k inc your salary so you can absolutely get a 1 bed not too far out for that.

And it seems like a slow down is on the cards, so your mums money isn't going to devalue in the next 6 months.

Would be best if you can get a 2 bed - then you have the flexibility to rent out the other room.

Wait,myou don't want to shape your career around a property. You cannot yet know where you want or need to live. Buying and selling property is very expensive in itself so must be properly researched and thought through.

If your DM is absolutely intent on buying then buy somewhere to rent out, possibly student accommodation in a town with short supply and wait for a couple of years.

What's your total budget? You could look at buying and renting room(s) out to friends - best of both worlds. Although you'd need to go a bit further out to get something for your money.

Would it be possible to buy and then let out one of the rooms to a friend / someone you like on your course?

I have several friends I was at uni with who bought with help from parents in East London (around thirty minutes from our Central London uni) and by the time we graduated from our post grads four years later they both had well over £100k in equity. One stayed in the flat and let's the other room to a long term lodger, the other sold up, paid her parents back and then used the equity to buy herself a place outright up north where she is doing her PhD. If I'd had the chance I'd have loved to do the same - it's money for old rope really (although the comments about Brexit are very wise!)