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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Aib ungrateful?

216 replies

Changemymindchangemylife · 14/06/2016 22:53

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?

OP posts:
TinyTear · 16/06/2016 14:06

Buy and get a lodger, you will still be living with friends and your mortgage will be half paid for... my DH did that in his 20s

Modus · 16/06/2016 14:11

My advice would be to buy something you can afford, rent it to tenants, and enjoy being young!! You only live once and it would be great fun to share with friends and enjoy being in London and all it has to offer. When you are older you can then sell, having taken advantage of the market now and not have any pressure. I'd be really grateful to my mum tho for that much money - perhaps you could include her in the search for a rental -I'm sure she would appreciate that? Best of luck with the new job xx

MsHoolie · 16/06/2016 14:24

Buy somewhere else and rent that out just to get on the ladder. Your mum should approve.
As long as the income covers the mortgage you are laughing. (May help your rent on your London Pied a terre!)

And I absolutely recommend living as central as you can in London whilst you are young... even if it is just for a year or two you will have a blast.

Really regret not doing so when I had the chance.
I turned down some great opportunities to live in NewYork/ San Fransisco, but chickened out and stayed near my parents village because as they aged I got anxious about them possibly falling ill and me not being able to whizz over!!!
Well my mum lived to 86 and dad is still going strong at 90!!!
So go have your adventures now whilst you are young.

I moved out at 18 and rented for 8 years because I was a bit silly and frivolous. Pissed my money away!
Really wish I'd got on the ladder sooner. I'd have cleared my mortgage at 45 if I had bought at 20!!!

What a great position to be in!
Wish my parents had been able to donate me money like that! 😝

2016Hopeful · 16/06/2016 14:24

It is extremely generous of your mum but I still think you are wise to live there for a bit to make friends and have an easy commute. Once you have lived there for a bit you will get a feel as to where you would like to live. I don't think it would be a good idea to buy somewhere straight away as you may hate the area and then end up selling and wasting money on 2 moves.

Once you have been there for a bit I would buy a flat somewhere you like and can afford and then you can either live in it or rent it out. If you manage to get a 2 bed you could rent a room out to a friend if you don't fancy living alone.

margewiththebluehair · 16/06/2016 14:29

If you have just got a job and moving to London, then chances are you will not yet qualify for a mortgage. You would probably need at least 6 months worth of payslips for proof of income. So you can just respond to your mother that you can't yet get a mortgage. Wherever you go just sign for 6 months.

£200k sounds like a lot, but your buying power is still quite small. Assuming you are on a smallish salary (20-30k? - unless you are a banker on 40-50), which means the most you can borrow is about 80 grand. This gives you a budget of only £260-280k . It should get a 1 -2 bed flat in a good area for transportation. If you get a 2 bed flat - then rent the other room out to a colleague.

Get the smallest mortgage you can get - and if that means a smaller place further away - then it will be better in the long term. Plenty of great places outside of London.

This is your first rung on the ladder so remember the three golden things - location location location. Invest in a place with great transport links (no more than a 10 min walk to a station) and with shopping centre/restaurants.

ineedwine99 · 16/06/2016 14:30

I would stick with current plans, to get a mortgage you'll need proof of your new salary over a few months such as wage slips (thats what i had to supply) which you cant provide yet.

KatieNix · 16/06/2016 14:31

Hi OP

This is totally counter to my normal instinct. I am 35 and have bought and sold continually since my early twenties. But reading your post and the resulting advice, I'd say the issue is your mum sounds like she is thinking a lot about the generous gift and less about your career, and your success at this placement in particular, which is what will keep all the other plates spinning. If she's worried prices are climbing (depends where and what) and her cash is devaluing in the bank, there are things she can do herself to address that (which given that she managed to amass that sum in the first place she must be aware of) in the short to medium term.

Moving to London and starting a demanding career is enough at once, especially at twenty-three. I trained as a lawyer, with a long commute, as I was very 'practical', and I began to regret it quite quickly, as it was grim. I don't mind a commute now, but I'm married with kids and don't want to stay out til 4am dancing anymore.

It will take you time to organise a mortgage, view properties and scope out your prospects at your firm. A year of rent is money you'll never recover but there is nothing worse than feeling pressured in your life choices, and if you don't really have to be, then why?

Unless you have a very clear idea of where you want to live, and are prepared to put up with the risk of feeling life is going on elsewhere, you won't lose much by holding off. If it's now or never, take the money, of course, but I can't see how you can buy without renting for six months or so first without taking a huge risk.

Also does your mum know most grad schemes expect ridiculous flexibility and you could miss out on opportunities by being tied? If you do buy, try to ensure you can rent easily /offload quickly if you need to.

It's not ungrateful to want to get something right, it's all in the way you phrase it to your mum.

Good luck!!

calandbump31 · 16/06/2016 14:33

are you a mum?

ineedwine99 · 16/06/2016 14:37

Plus it's not just the deposit, it's the stamp duty and fees, then you need to think about your cost to commute, annual rail tickets from say Essex are very expensive (from when i considered moving south)

Bumbelbee · 16/06/2016 14:41

Yes, buy something you will want to move in to and then let it out. Can top up with a buy to let interest only mortgage if you can't make the rent cover the cost of a repayment mortgage, and you will have a really decent property to use when you are ready. You have a good chunk of deposit already so you should be able to get a decent deal. However, do go and check out the tax situation as there are changes afoot that may make btl less attractive, and get good advice and a good letting agent :) Or, buy a 2 bed flat and take a lodger/s in (as there are now big tax allowances for letting a room in your own home) and you will be able to share with someone and also earn money towards your mortgage costs at the same time. Prices may be lower if there is a Brexit, and they tend to drop over the winter as well. Can understand that it all feels too much though, but I bought my first house in London at 22 and struggled for years, but never regretted it as long term it has gained in value more
than I could earn in a lifetime at work, so I can understand where your Mum is coming from :)

whois · 16/06/2016 15:05

Yes, buy something you will want to move in to and then let it out. Can top up with a buy to let interest only mortgage if you can't make the rent cover the cost of a repayment mortgage, and you will have a really decent property to use when you are ready.

This will be very very very hard for the OP to do. BTL mortgages are a lot harder to come by, esp for people who are not already home owners and for people with no proof of income. Interest only are also much harder to get.

stickystick · 16/06/2016 15:14

If your mother is really really worried about London residential property prices going up a lot in the next 12 months then as Katienix says she could invest the money in something else, which shadows London residential property prices (eg Foxtons shares!). However there's a lot of evidence that property prices have stopped rising and have even fallen in many parts of London over the last 18 months so her fears may not be warranted. As we approach this referendum, cash is not a bad thing to be in for a while, or something low risk like gilts or inflation linked gilts. If the vote is to Leave, property prices could fall a lot further - although interest rates could rise and mortgages become more expensive as well.

As for your own dilemma, definitely try the experience of house sharing for a little bit, just for the experience and to get a feel for where's handy for commuting. You are too young to be schlepping in from Sussex or Kent with all the middle aged mums and dads every day. If your experience of inner city house sharing is anything like mine, there will come a day when you are heartily sick of arguing about who has failed to do the washing up again, begging the landlord to fix the shower/fridge/rising damp, and watching half your take home pay disappear into said landlord's pocket with nothing to show for it. At that point you will call your mother up desperately hoping she hasn't blown the whole £200k on the horses/a round the world cruise.

I understand why a few people have advised you to buy somewhere and live somewhere else but financially the saving you MIGHT make by getting onto the housing ladder now will likely be wiped out by other costs. Buy to let mortgages are not as cheap as residential ones, and you cannot deduct so much of the mortgage interest from tax as you used to be able to do. Any profits you make on the rental income (after buying it, legal fees, stamp duty, doing it up, agents fees, service charge/sinking fund, insurance, maintenance etc) will be taxed. And you may well have void periods between tenants where you are paying for everything and receiving nothing. Add up all of this and there's a good chance you will have a lot of hassle and won't make any money at all.

Notmuchtosay1 · 16/06/2016 15:49

When my father passed away he left me his flat in Surrey. I live 150 miles away with my partner (in his own house) So I sold the flat and bought a 3 bed house nearer to my home. So I now own that house but I rent it out. I bought it 16 years ago and it has almost doubled in value. So I have had a better return from my investment than I would have had it stayed in the bank. Seems a good thing to do with your money. It gets you on the housing ladder too. You'd probably have to buy out of London though.

Jenni2legs · 16/06/2016 16:05

I bought a house I didn't really want and felt trapped. Wished I'd taken my time, can you spend your time renting to find a house you really love?

smileyhappypeople · 16/06/2016 16:34

I haven't read all thread so may be repeating others..... I also don't know anything about London house market as we are way up north where £200k would get you a 4 bed detached, possibly with change buttttt I also know we didn't buy years ago and the struggles like hell to get on property market.... Sooo I think if possible I would go for the buying option but still rent your spare rooms to your friends.... If that is at all possible? I can imagine you would probably still need a huge mortgage though even with 200k deposit in london

IJustLostTheGame · 16/06/2016 17:08

Buy a one bed flat in Brighton and rent it out. You can live on the rent.

I love brighton.

caroline161 · 16/06/2016 17:14

£200,000 ? When I was 19 my mum sold me her old car for £1000 I can only dream about what some people get from their parents.

Gilly01 · 16/06/2016 17:14

You are not ungrateful just sensible. Although property is the best way to invest money

pollymere · 16/06/2016 17:24

Could you not buy somewhere and then house share using their rent to cover the mortgage? My BIL did that very successfully. Consider the end of the Met line or similar. Tube prices but cheaper housing.

WaxyBean · 16/06/2016 17:45

I'd buy further out for the 200k plus a bit more. If you didn't want to live in it you could always rent it out for now. Areas like Croydon have good links and reasonable house prices.

KayTee87 · 16/06/2016 17:53

I would buy whatever you can reasonably afford further out (that you might like to live in in the future) then rent it out whilst you live in london for the next year or so. Make sure to get advice on what property will get what amount on the rental market to ensure any mortgage is covered plus some extra to put into a savings account for any unexpected costs. If you wait to buy you may well live to regret it as prices go up but on the other hand in your situation id probably rather live in the city for now so you could have the best of both worlds.

KayTee87 · 16/06/2016 17:56

Could you not buy somewhere and then house share using their rent to cover the mortgage?

I'm assuming op wouldn't be able to get much of a mortgage at the moment as she has only recently started a graduate job so she wouldn't be able to afford anything anywhere near big enough in london to have spare rooms for house mates. Banks won't accept future income from lodgers as guaranteed income so op wouldn't be able to get a bigger mortgage by saying she will rent out rooms.

franmacilvey · 16/06/2016 17:56

Funnily enough, buying a house or flat you love, is not about logic or common sense. The biggest decisions we make in life have nothing to do with that, and everything to do with following our heart.

OP you are doing well to plan your life, and if you are comfortable with your decisions so far, stay with them. That money may well solve a few problems, but will also create others that you probably don't need right now: Maintenance, repairs, social isolation, that sense of being responsible.

Try not to let your Mum persuade you into a course of action that feels uncomfortable, even though she means well. Even if you make mistakes - and we all do, all the time - that is your right, and the only way you will work out what works for you. I suggest you wait at least a year before deciding what, where and whether to buy a home. :)

Hullygully · 16/06/2016 17:58

Have you considered Darfur? I understand it's very cheap there. You could put up some tents and rent them out too and work from home. Or open a little cafe. Why not a florists? Everyone loves flowers.

pamhill64 · 16/06/2016 17:59

Why can't you be a landlord and rent rooms to some mates a similar age? Parents could be mortgage guarantors so you could get a bigger place/mortgage? Best of both worlds surely? My daughters friend had a house she rented out rooms in in Uni and when first qualified, with an inheritance and parental help. Sold it for a profit! Not dead money as your parents say.