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?

Rather than essentially you renting from him, would your dp consider you buying somewhere together, or you getting a share in your current house? If he can afford to, he could buy a further investment property

I agree with you, you don’t have a huge amount of wealth so pooling it into a single asset that has maintenance costs and other associated expenses doesn’t seem sensible. If your tenants complain of a leak that could easily wipe out your disposable income for the month. I think you’d be better off putting a bit more into your pension or saving into a stocks and shares ISA.

OP doesn't need to spend £500 on a financial advisor to start paying into her pension. She just needs to open a Self Invested Personal Pension account with AJBell. They have a huge range of funds to choose from, tailored to any kind of investor, from conservative to adventurous. Plus all the explanations a novice investor might need. The customer service is brilliant.

OP I’m concerned that you’re disadvantaging yourself. If you’re paying for most of the food and part of the bills, but have no interest in the house, you’re doing yourself down. You’d be far better rejigging the finances so that the money you’re paying goes towards the mortgage and get yourself on the title. This “I’ll pay for the house and you pay for the food and bills” nonsense isn’t fair on you. He’s effectively treating you like a lodger - he gets the benefit of part payment of his bills and all of his food, whilst still owning 100% of the house. I’m not saying he’s knowingly taking you for a ride, but it’s not fair.

Oops I'm sorry @nohouseforme I missed that you had said 40s when I mentioned LISA. Me too!

Start saving NOW and look at what you can cut back on whilst you assess your options.

@PurplGirl I guess he's doing this so she has no claim on the house.

Sadly you may be right. I wish people would realise their entitlements and what’s fair when it comes to relationships and money. I just don’t understand why couples living together don’t each pay a share of mortgage, bills and food. One joint account for all of the household things that each pays into (either 50:50, proportionate to earnings or whatever).

Probably been mentioned but if it was me I'd put some into a personal pension a d some towards an emergency fund e.g. you break up. That might never happen but you'll have some savings at least.

I'm a landlord, and think you're not in the financial position to buy a BTL. You need a minimum of 25% deposit PLUS legal fees, (you'd likely be exempt from Stamp Duty as a first time buyer, not sure if it being a BTL changes that though). Saving £200 would take you forever to get enough for a deposit. You also need a contingency fund of a few grand in case the property suddenly needs a new boiler or something. Plus, if you're earning under £25K, that'll rule out a lot of lenders for you, so you could be looking at higher interest rates just because of your low wage.

If I were you, I'd probably put £100/mth into a private pension, then £100/mth into an ISA, interest rates are still good at the minute. You could also go with stocks and shares ISA once you've saved something to invest.

Even with one BTL property, the rent from it won't be enough to keep you in retirement, and if you're only just keeping your head above water, it's unlikely you'll be paying off the capital to have a large lump sum if selling it for your pension.

Well done on getting debt free.
You said you have lived in poverty, so if I was you I would be making sure I enjoyed having some disposable income. Do some of the things you enjoy, take nice holidays. There is no way I would be saving or investing all of my disposable income and buying a home does seem unrealistic for you.
I watched my grandads health deteriorate really quickly once he retired. My nan passed away in her early 60s from cancer. It puts thing in perspective for me as to how short life is. It needs to be enjoyed now. I do have a good workplace pension and have some savings for an emergency but I am definitely more focused on enjoying life now than trying to save for retirement.

Yes we are both early 40's. My debt is now paid off so I am in a position to start making more substantial savings.

It's not sensible NOT to plan for the future, I will keep looking into options for long term savings and investments and start putting more into my pension.

I don't mind that I have no financial interest in Dp's house. I put none of the effort in the get it in the first place and took none of the risk, nor do I pay towards any of the ongoing maintenance for it. I also don't expect to live for free which is why I'm happy to contribute in the form of bills and food. I do think it's a fair split.

Honestly if the situation was reversed I think I'd feel the same as Dp, it requires an immense amount of trust to share such a massive asset with another person. It's not that he doesn't care about me, he very much does and is a wonderful partner. He is just an extremely cautious person by nature. @PurplGirl I actually prefer to have separate finances.

My job may fluctuate a bit in terms of earnings over the year but it allows me a lot of flexibility which I really need at the moment, my mum isn't well so I take semi frequent trips across country to help care for her.

I am getting a promotion at work towards the end of the year so that will help too. There's lots that can change and probably will in years to come.

Do you pay towards the bills proportionally? Because you should if he earns more and the food bill should be split as well. Then you can save more
LISA is a good option.
There should also be a plan if he dies. So for every year you’ve been together you can stay in the house for two months for example and as you’d be looking to rent else where he should leave you enough for a deposit and first months rent. He could also leave you some furniture and white goods.
How do you split furniture and white goood purchases?

Yes we do @Autumn1990, it's not a 50/50 split.

So far there hasn't been much as far as white goods/furniture but Dp has paid for anything we've needed up to this point.

You could always buy some NS&I bonds if you decide to save, ties your money up but u can get it all back when you need to, you might win some money though. Never know.

Thank you for saying this. I hope it doesn't sound arrogant to say but I am really proud of how I've managed to turn my life around. I've escaped more than one abusive relationship and been through a lot of trauma that, at point time played absolute havoc with my mental health. 5 years ago I was on antidepressants and sleeping pills, I couldn't eat or sleep and lost 2 stone in 3 months.

I also don't think I realised just how traumatic living in poverty was until I was out of it. The humiliation of being in the supermarket and emptying every penny I had into the self checkout and still being a few pence short. Living in a place so dilapidated that the electric would cut out if I put the lights and kettle on at the same time. Not being able to afford heating and having to sleep in 2 sets of pjs and a dressing gown and waking up with bedsheets wet from condensation and ice on the inside of the windows. It was tough.

I'm also very aware of the fragility of life. Like I said, my mum isn't well and sadly I don't think she will make retirement age. It makes me want to live while I can but I'm also don't want to be so concerned with the present I forget about the future. It's a tough balancing act!

At the very least in your situation, I would be saving as much as possible in an ISA or good rate savings account. I would feel very vulnerable & unsettled not having savings.

Why do you buy all of the food? You can still have separate finances, ie. Your wages going into your own account. And then a joint account for household expenditure that you each pay an amount into. It just seems daft you buying all the food, enabling him to build up equity in his home. Surely you should share the benefit in some way? I’d find it a bit patronising if my partner was telling me I should be putting money away for my future but not wishing to be fair with the current household finances. I don’t mean any harm, it is of course your relationship and you know him best. But since you came her for advice, I just felt I should really impress the importance of equity.

Well you should definitely save for the future. A buy to let property is probably not a great idea for many reasons but saving is good.

What about better qualifications towards a better paying job in the future?

OP I think at the very least you should be splitting the bills and the food shop proportionally according to income. It's good that you're not contributing to the mortgage or upkeep of the house, but just make sure you're not then paying for that in other ways.

A more sensible situation would be for them to buy another property as a joint asset and live in the new property, and rent out the property that her partner solely owns. Then, OP has the jointly owned property in event of his death (providing she can pay the mortgage alone) and he can leave the home he owned previously to whoever he likes.

That way, OP is gaining more financial security and isn’t purely funding her partners future.

Congratulations for being in a situation now to think about the future, and saving towards it!

I would go to a financial advisor and start investing in some funds with a good growth rate, and then after 5 years see what position you are in.

I know it sounds a bit crazy, but are you in an area with beach huts? They can be a good investment, and you can rent them out in season. Short term rentals can be a job in themselves, with cleaning and meeting people to let them in.

I agree with this OP. Lots of people are probably talking about savings plans that you have no clue about if you've never had money to save before. So my advice on top of the quote above, would be open an account with a bank that has a 'Regular Saver Account', such as First Direct. You can save anything you want from £25 a month to £300 a month, and it doesn't have to be the same amount each month, unless you want it to be, so if an unexpected expense comes up, that you really can't avoid paying, as long as you can afford to keep paying the minimum £25 a month, the account will stay open. This sort of account pays the best possible interest at the moment of 7%. Most other 'Easy Access' accounts pay 5% or less. Please ignore anyone recommending a normal 'CASH ISA', as while you don't pay tax on the income, they do tend to pay less interest, and you are entitled to earn up to £1,000 in interest each year, on ANY savings account WITHOUT having to pay tax anyway, and you're very unlikely to fall into that bracket. So start simple, with a REGULAR saving account, and stash as much as you possibly can in that account, for as long as you possibly can.

OR

If you don't feel that you're likely to need the money you can afford to save, then do put it into a pension, as the younger you are, and the longer the money is in a pension, the more it will earn for your old age.

That would be good, but might not be feasible.

There is no proven rental value on their current home, so I think lenders would simply look at income vs (outstanding mortgage + additional mortgage). Unless the OP's partner is a very high earner, I doubt they could borrow enough to buy another home. Switching from a 'normal' mortgage to a 'let to buy' would also result in higher rates and reduce affordability further.

Oh I know it might not be feasible, but it would certainly be worth exploring (over OP buying a property solo on a low income)

It also depends where they live. If they are somewhere that homes cost less (like where I am in Scotland) they might be able to pick up something half decent for under £100k. They are also allowing you to take longer terms on mortgages which helps with affordability (we took ours over 33 years) - it would depend on the value of the house they are living in, the outstanding mortgage amount, and their local market.

I literally wrote a post exactly like this 5 years ago. I had to dramatically increase my earnings and get myself in the position to contribute to a new mortgage. He was happy to move to a place though where it was a joint mortgage. I found it difficult as I have a kid though but I retrained and absolutely burst my gut.

I grew up pretty poor too and it was a difficult cycle to break but you can do it. Would he consider remortgaging or entering into a mortgage with you?

xxx