To want to improve our lifestyle today and sell the property?

[preparingforthepileon]

I have NC for this because I am including a fair bit of financial info and I also think I am going to get a fair amount of stick. I am aware we are in a privileged position but I think these decisions of 'jam today vs jam tomorrow' are pretty ubiquitous and not income / wealth dependant (within reason) so I am hoping for some useful advice (and a different perspective) as well as the expected abuse

I work and my DP doesn't. I earn about 140-150k a year and he used to earn the same. We have two small kids. We don't live in london anymore but have a flat there which we used to live in. It's been valued at £1.35m and we have a £625k mortgage on it. At current interest rates it doesn't really generate any income once we have maintained it, paid the agent etc. but has appreciated in value a fair bit since we bought it.

The mortgage on our PPR is about £470k / 2.5k a month and I put everything over 100k into a pension so my take-home is about 5.5k.

We can just about manage (we don't have any car loans) on my salary with the current situation but it's tight.

I think we should sell the flat in London, pay off our current mortgage and invest the rest. That would give us a great standard of living now, even though only one of us is working. He thinks we should try and hang onto it. I am not a spendthrift but I am more 'jam today' and he is more 'jam tomorrow'.

Just to add we are both in our 40's (him late, me 40). He has about 500k in a pension, I have about 200k (I've only been contributing to mine for a few years) but we also have about 900k in other investments.

So my view is our situation is good and we should enjoy the lifestyle a bit more now.

What do you think? (hard hat on)

Am i being unreasonable to want to sell the property?

We aren't married (I know, I know). Our financial situation is very messy in that we have both been happy to do whatever was expedient at the time so I have contributed to stuff that he owns and like wide he contributed a chunk towards the property we currently live in that I own. I know it's not sensible but on the upside no-one has obviously contributed more than the other (iyswim) so although I know we need to sort it out, I don't feel too insecure about it right now.

If we split up he'd keep the 900k and we'd split everything else in half.

As I say, we can manage but it feels unnecessarily tight given our broader financial situation (IMO)

I agree with you that it goes quickly in this climate

I would sell it, but put most of it into long-term investments, with maybe £100k for specific things like the US trip and the campervan. I wouldn’t use it for general lifestyle improvements. I think you should basically live to your income, but one-off windfalls are good for one-off expenses.

Why do you have a nursery bill when your husband isn't working?

why not

I think he’d be mad to put his half of the flat equity into your house.

And given everything else you’ve said, you absolutely both need to talk to a financial advisor and get watertight wills. And probably get married.

Am I the only one thinking, OK can't buy a camper van but I have £900k stashed away plus a flat worth £1million and asking why not?

The future is a different country. It's OK to plan for it via pensions and investments, but it's healthy to spend some now and again and it's good for the economy too!

Just read that you are not married. Ouch. You need joint and separate financial advice.

On the camper van - this is an excellent time to buy a van! Lots of people got them after covid lockdowns and are now fed up of #vanlife.

I'm imagining the £900k is something like a future share in the family farm or another illiquid business.

Yes, it's something like that.

Both of you would pay inheritance tax on your savings and properties if something awful happened to one of you. Don't have to get married, civil partnership? Makes everything nice and legal. It for sure makes sense when have children.

Yes, I think OP confirmed that after I posted. So the flat could be sold now to go to the US on holiday for OP to see family, and to buy the campervan.

The future share in the business is the fall back + income from the balance of sale of the flat after taxes and costs.

I don't think I'd hesitate to liquidise the flat. 75% net proceeds re invested and 25% on current wish list items.

I know - we did plan to get married but covid scuppered that and we haven't got around to it as we've since had kids. I think we should go to the registry office, he thinks we should have a big party but equally he's not organising a big party so we're not married! He's coming around to the registry office idea though.

You are financially secure and should be getting a lot out of life. No one knows what's around the corner so in your position I'd sell and start living the life you want. By the time you're ready you'll find you don't actually want to do much. It's not being reckless, it's being realistic.

If you get married then if you split you get half of that 900k though. And possibly his pension. That said he could declare he’s main parent/carer and go for your income. See an advisor, this is too much money floating about to casually split ‘amicably’ believe me. My XH was a complete piece of shit when we got divorced and tried to move money and do all sorts to leave me penniless, he couldn’t though because we were married and he just showed himself up, and didn’t achieve what he was trying to by cutting me out of assets. If you don’t love and trust someone enough to get married, don’t assume they’ll be fair and cool if you split.

This should all be in black and white. Also he’s the owner of the illiquid assets? So the house you co-own brings in nothing. The house you live in you own. You work full time and pay for everything. So if you split he walks away with the 900k assets, the things that aren’t growing or doing anything gets split evenly, and you’re still working and paying the current mortgage.

Actually think on this occasion you should consult an IFA.

It's not that we don't want to get married - we had planned to but covid got in the way. We know we need to get it sorted though.

I think it sounds sensible. The property market in London isn’t hectic and the moment and you will arguably make a better return on the invested funds. Plus a life with no mortgage is a lovely proposition.

There is no reason that you could not be legally married before the end of the year. A party isn't essential but safeguarding your financial future is and clarifying things re home ownership and the children

No that’s fair enough and I get that, but it’s a huge amount of assets to be so relaxed about the potential division of. I might be adding it up wrong, and I’m sure there’s a backstory of mutual help, but it reads to me like he’d come off better if you split, despite you contributing more. Whereas if you were married it would be rebalanced and that illiquid would be half yours. He’d also get a share of the home you live in though so it’s potentially swings and roundabouts but then there’s pensions, too. Worth thinking about. Will he retrain for when the kids are in school?

I am.older and I can tell you that it gets expensive when you get older. We dont know what will happen to NHS in future and you could get all sorts of illnesses later. People just dont realise when they are young how things change as you age. It's not always bed of roses. My advice to you eould definitely be to hang in snd save hard. Yiu can skwsyd dornd later ehen you don't gog more behind you and haven't got do long left on this earth.

@EverybodyLTB
so they should save every penny and then spend it all when they are really ill and need care?

sounds like a miserable life - miserable saving and then miserable slowly dying ( possibly worse get hit by a bus and never spend any of it )

Yeah - it's been easy to be relaxed about it, and he is equally; he contributed about 200k to our current home (which is mine) so it all feels very 'shared'. I realise that things can change though and it would be sensible for both of us to formalise things.

I am not sure about retraining; there are lots of things he could do but equally he could be a contractor doing a similar job that he used to do which would be less stressful than his old permanent job. We like the idea of starting a business but we'll need to review that plan when the kids are a bit bigger and we have time to breath.

Do people actually even read opening posts anymore? It says right there we have two small kids

First of all, get married! Or make a will, one or the other. Romantic I know! But you have kids, you need certainty.

Secondly, I agree, there's no point in doing anything before the budget, who knows what will happen there. Or with house prices.

Thirdly, I'm someone who massively, hugely regrets selling a London flat many years ago, I took the the jam today but had I kept it it would have paid off my current mortgage and some. Hindsight is amazing.

I completely get that your income doesn't give you a huge monthly amount to play with once everything is paid for but I would say that you are in a good position and I think IIWY I'd hang on to the flat because in 10 years time you might be really, really glad you did.

In the meantime you're not living in poverty but I would forget pensions for your kids, they're young, it can wait and prioritise things that make you happy. So I think I'd borrow for the US holiday (at 0%), forget the camper van for now ( I don't reckon they're as much fun as they look, especially with little kids!) and prioritise happiness and some treats.

Also, your children will get more expensive, sorry, but they just will so I think while you think you need more money now you will carry on needing it until they are erm, in their twenties? Sorry! Teenagers are expensive, university is really expensive, I think you'll need it more in 15 years than you do now. Good luck deciding though, it's not an easy one.