To think buying my own place would be a terrible idea?

[nohouseforme]

Dp and I have been together a few years and live together. He owns his house but I don't pay towards the mortgage but do pay a contribution to bills and pay for most of our food. We aren't married and won't be getting married.

Basically, due to a combination of horrible bad luck and less than stellar life choices I've ended up in the situation where I have no significant assets and no real savings of my own. I have no private pension and have accepted a long time ago that I will (barring a miracle or lottery win) never own my own property and will likely have to work until I drop. Whilst I'm not 'fine' with this I've accepted it is what it is. I was born into a poor family and have never had much, living in extreme poverty at times, and as such I've given up being frustrated at not being able to afford certain things, am very frugal, and just generally try not to stress out about financial things as I know I don't have much choice and I will just have to deal with things as and when they come up as I always have. I work full time but just above MW which is very standard for this area and I'm very lucky to have even found a full time contract. I'm very proud of myself for finally paying off all my debt so am now completely debt free and trying to build up my credit rating.

My contrast Dp has been very fortunate. From a middle class family, got family help with his house deposit and earns quite well. He works hard and is careful with money but I think is a little bit blind to the good luck and extra advantages he has had over many (including me) that's helped put him in this position.

He's been encouraging me to save a deposit for my own place which I can then rent out and is a potential source of income for retirement.

Whilst I agree this is a good plan in theory, in practise I think it would be a terrible idea.

I have max £200 a month of disposable income to put into savings for a deposit. If I did so, after 5 years I'd have a deposit for a very cheap place, but in those 5yrs I then could not do anything more than the basics. No holidays, no paying for any unexpected expenses, nothing. That's really not a sacrifice I'm prepared to make!

Also, I'd then have to worry about fees and the like which are thousands extra, and renting comes with huge additional expenses and risks like someone trashing your place, just general wear and tear that comes with being a landlord, tenants who refuse to leave and having to go through expensive court proceedings to get them out, etc. That's if a bank would even give me a mortgage in the first place as I'm in my 40's and don't earn much.

I don't disagree that investing in something for the future is a good idea but I don't think this is a viable option. Aibu and should seriously consider this, or am I right and DP is BU to think this is possible in my current circumstances?

I'm not sure I follow. You contribute to bills and food, but how is it equivalent to a cheap rent? If that amount was instead spent on renting cheaply (if you split with your DP), then what would you use to pay for bills and food?

It does as though you are financially precarious. Regardless of whether you have separate bank accounts, you'd be left very badly off if you split. You talk about saving meaning that you couldn't afford holidays, but if you were to split you wouldn't be able to afford holidays either.

I don't think you should necessarily consider buying a property, but you do need to be saving that £200 a month if you want to have any financial security in future.

@InterestedinEfteling I pay something equivalent to a cheap rent in a house share, plus most (but not all) food. Like I said I don't earn much over MW plus I have my own bills and stuff to pay for.

I realise I did misspeak earlier though, I said max £200 to save whereas actually sometimes I do save more it's just that £200 is what I can comfortably save every month, including winter when my wage is lower. Last month I saved £300 and over the summer when hours go up I will probably save more.

At the moment it doesn't sound like you'd be able to rent if you broke up let alone have a buy to rent property. If you are in a holiday spot it might be worth the pair of you buying a caravan on a holiday site and renting it out for the season.

At the moment you are fully self sufficient but do you have any contingency plans should you break up, made redundant, have a serious injury or fall ill? I think there are lots of things you could put your money in right now rather than a buy to let.

You're definitely not in a position to buy and rent out a property. Many private landlords are selling up as it's just not cost effective any more.

You do need to wise up and get some savings behind you though. You don't say how old you are but regardless of age you need to pay into a pension.

As you need access to savings, my advice would be to put £100 per month into the best high interest accessible account you can find and £100 into a pension.

I'd also be seriously thinking about whether I wanted to be with someone who cared so little about my financial security.

It doesn't matter whether you want kids or not. He could drop down dead next week and you'd be left high and dry with nowhere to live. Doesn't it bother you that he doesn't care?

You should both, at the very least, have Wills sorted so that if anything does happen to either of you, there is some element of security.

I know of an unmarried couple with no Wills... he died unexpectedly. Their home was his... it's been an almighty mess to sort out financially. And a lot of the money that was there has been lost to the Government in tax.

If your OP is so concerned about financial stability he needs to look a bit closer to home!

Firstly well done for getting yourself where you are now-financially stable and no debt! I come from the extreme poverty background myself, I know how difficult it is to beat the old demons and acquire good financial habits. I don't think buy to let is a good idea for your circumstances (for all sorts of reasons above). How about investing into a private pension? AJBell is an investment platform which is very easy to use. No brokers fees. They have a huge amount of investment advice for all levels of investing knowledge and their charges are very low. You can open a SIPP for £250, buy one of their own funds and watch your money grow. Stock market will always beat cash over long term, £250 today will be worth a minimum £500 in today's money in 15 years time. You can then add up as you please into your SIPP or set up a direct debit. If you pay any income tax at all, AJBell will claim it from HMRC on your behalf (i.e. if you paid £250 into your pension they will claim £50 tax providing you did earn enough to pay £50 tax in the first place). The deadline to open a SIPP (self investment pension) and claim tax for 2023-2024 financial year is 5th of April.

Putting the emotional relationship to one side, the OP is effectively paying rent for a house share and has said that that amount would be enough to rent her somewhere else if necessary. They keep their finances totally separate so I don't see that either should be financially responsible for the other if she moved out (for whatever reason). Putting the relationship back in the equation, would her partner be comfortable with this situation if he suddenly passed away or would he leave her a small nest egg to help her settle somewhere else? As he has suggested she becomes more financially savvy, it doesn't sound as though he'd be that bothered but I could well be wrong.

Why do you have so little left each month? If you have no rights to your DP's house, you should only be paying your share of bills, food etc. He shouldn't be benefitting from you at cost to your financial security.

Yes @Lifestooshort71 effectively that's what I'm doing so the 'rent' I'm paying him I would use to rent a place of my own. My bills I already pay and food would be less as I'd be paying for 1 not 2.

I've had to leave my home unexpectedly and at short notice before and I've made it work. I had no choice! Same if DP died or we split. I'd figure it out.

Dp has said he will make provision for me in his will but hasn't gotten around to doing it yet. We have only been together 3yrs so I don't think it's unreasonable for him to wait until he's comfortable to do that, it's a big deal for someone to leave their biggest assets to someone they aren't married to who isn't family. He does very much care about me, which I know is why he's concerned about me making provisions for my future.

Lifetime ISA?

You can put in a maximum of £4k per annum and the government matches whatever you put in with a 25% bonus.

So, you put in £200 p/m and end up with £250 p/m. That works out at £3k per year.

You could invest in something like a passive global stocks ETF such as L&G Global Equity code LGGG with a 0.1% management charge. Investment firms such as AJ Bell allow regular monthly investments for £1.50 per trade.

You can access the money as a first time buyer, otherwise it's locked away until you're 60.

I am a landlord and would not recommend it, and I haven't even had any major issues with tenants. It wasn't something I planned and it doesn't make money (am higher rate tax payer). In fact I pay towards the mortgage every month but obviously once the mortgage is paid off it will be good and I am sticking with it as I don't have much else in terms of a retirement plan.

Savings and sorting out a plan for your future sounds like a good idea but I don't think property is it.

The most important detail is how old are you ? If you are 30 a lot different to 50. You earn NMW and have a contract but are you able to have a works pension.Life has many surprises and being old and cash strapped is not the same as young and well.Glad you are able to save now my advice would be to get a savings plan together and really save for a couple of years.Good luck

A lot of people in the U.K. still think buy to let is a golden money train which it really isn't any more.

Sounds like he's not really up to date with the tax changes etc as well as to be honest as others have said it's just not a good idea if you don't have spare cash to cover new boiler/new roof etc.

There was a time to be a BTL landlord, that time is not now, you get a bad tenant and that can wipe out profit for a few years. Plus changes in housing law means it’s much higher risk.

Does your company have a pension scheme and what age are you?

One of the best things currently is a LISA but you have to be under 40 and any savings made can only be used for a mortgage or retirement. It’s max 4k per annum but it’s 25% interest tax free. This product is far less available now but here is a link to the GOV website outlining this, https://www.gov.uk/lifetime-isaYou have a small pot to play with being a landlord or playing the stock market is risky. You need to go in with your eyes open and be prepared to lose and afford to lose it without if affecting you if you invest. My DH lost a lot of money trading one day many years ago, his only big loss, he did recoup it fortunately.

I’d suggest you DO save and buy yourself a little place… but to live in by yourself.

How can you have a future with a man like this? Won’t marry you to provide you both with the legal security that comes with that, and acts like he’s doing you a favour charging you mates rates rent, presumably that still benefits him financially with bills and his mortgage. Whether he says it goes directly into his mortgage or not, it still does in a roundabout way.

You mentioned your financial position being due to some poor choices. He sounds like another one. I’d see him for what he is, an opportunity to pay off your debts, save and get yourself a little money behind yourself for when it goes tits up.

You sound very sensible and level headed. Good luck x

That's quite a crazy level of entitlement coupled with advice to use a partner for financial gain.

They've only been together for three years. OP brings no assets to the relationship. Why should her partner put his assets at risk, when they don't want children?

Would you give this advice if roles were reversed or call him a cocklodger?

I think it's too much risk. If the house needed repairs or the place got trashed by renters you'd have no margin. Imo, being a landlord should be for those who can absorb the risk.

Is there anyway you could share the food costs equally, instead of you paying more? Have you talked to your partner about your concerns?

Because the partner is quick to tell her exactly what she should do with her money.
If he’s happy to cohabite with someone to benefit himself (she clearly isn’t cocklodging if she’s paying her way) but not pool resources, get married, generally do anything after THREE YEARS to suggest he’s in it for the long run, then what’s the actual point?
He could be suggesting she saves as much as she can for five years and then they buy together, or a stake in his property. He’s mentioned a provision in his will that he never gets round to. But in reality he has no intention for her to be any more than a lodger.
I think it’s best OP saves her own money and puts a roof over her own head.

At this stage OP, I think the best investment you could make is in yourself.

What are your interests? What is your dream job? What are you good at? What do you enjoy?

What courses or work experience is available to you in your free time? What can you do in the next 5 years that would lead to a better longer term financial position (job with a better pension, better pay). Or even a job you can do on the side of your current job.

For example...I'd like to write childrens books. I could do this in addition to my day job, but it is going to take me a number or years (and investment in myself) to complete some courses and write the material.

So you are having to live frugally, have not got a pension, and most likely will have work until you drop. You partner, who you live with, earns well and has a house that I assume will be mortgage free at some point. This is not a partnership.

Putting aside the fact that he doesn't want to get married, I am assuming that you are in a loving committed relationship, so why isn't he making an effort to help provide for you in the future? It would be the loving, caring thing to do. For instance, if he is not struggling financially, he could have you paying less into your home and you could use the saved money to put in a pension pot or to buy property.

Of course, if your relationship is not all those things, I would wonder why you are together.

what’s your line of work? have you thought about moving abroad? tax free salaries in the Gulf even for jobs like sales reps, with better living standards and opportunities to save while “living life”. you can’t continue this way, so start thinking outside the box x

Talk to financial advisor. You may be better paying £200 a month into a private pension.

Why are you paying for most of the food? You should be sharing that cost equally then you'd have more to save each month in a pension or isa.
I'd sort that out with him ASAP!

But you are right BTL is not a great idea for you.

Think they've only been together 3 years so its a bit much asking him to cover her so she can save more. As I understand the OP, you don't pay rent or mortgage, but share the bills and pay all the food? Is that right?