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?

I wouldn't jam today with a man that isn't showing signs of going back to work.

At most you might consider dipping into the jam pot: sell, reinvest some, spend some.

Property investment isn’t what it was and I would 100% get rid of the flat and invest. Investing is a long term investment too, so don’t think this is at the expense of being able to enjoy it later. I think selling and investing is just good business sense.

I’ve shared our expenditure up thread. I’m sure we could jig things around to afford the holiday of needed by cutting back elsewhere but my broader point is just that I would like a bit more disposable income and paying off all (or some) of the mortgage on our primary residence would allow that.

The 900k is not liquid or income generating at the moment but we believe it’s the right thing to keep that money where it is.

You earn so much money, go and spend the £1k on a financial advisor who will visually show you exactly what each option would land you with each month/in retirement. Personally, I'd sell and invest.

We’ve actually spent some time with an IFA in the past but the issue is more the decision making. I have some decent spreadsheets which will project the value of our investments / properties etc under certain assumptions so we can fairly easily come upon the ‘best’ solution from a financial perspective (although that would be based on assumptions which might prove to be wrong) but it’s really about how much enjoyment do we have now and how much do we ‘save’ for the future which we struggle with. I think we’re both over-thinkers to be honest and we are fortunate that we have a lot of options so the two things can lead to paralysis.

The general gist of this thread seems to be more aligned with my view, which I was expecting to be fair. I think I am on the sensible side of normal whereas my DP is unusually focused on doing the right thing for the future and he’s terrible at treating himself.

I think a compromise to sell the property and reinvest some could work. He’s just concerned that the London property market will have a surge and we’ll miss out. I focus more on what that money could do if redeploy it rather than what we might miss out on.

Yes, you’re absolutely right.

I’d sell the flat, the returns on something of that value in London plus a mortgage at today’s interest rates mean it’s barely worth it.

TBH you’d be better off just investing your ~£800k elsewhere - my punt is that the growth on this would be greater than property appreciation in an already overpriced market like London at this point (particularly for a flat at this price).

The thing that doesn't stack though is that he's worried about losing hunch imvestment money but isn't worried enough about going back to work to earn real money.

Which is fine in the practical sense that you can afford it but doesn't logically tie with the idea of missing out - he's already missing out on real money by stepping out in his prime earning years So why worry about losing potential London hosuing money?

We both place a value on him being home with our children so he feels like that’s money well spent (or not earned!) and I agree.

He’s not desperate to have the maximum amount of money at all costs but he doesn’t want to bake a bad decision or fritter money away as he sees little value in higher day to day spending, if that makes sense?

Your next post was 2 minutes later. What job do you do that pays 140k a year and 'getting back to my job for a bit' is 2 minutes work😂

I know 🫣

Turned out there wasn’t much going on at work. Also I’m a bit preoccupied by this decision at the moment so I got lured back in 😂

I work in business development in the City. I’m fortunate it’s not too hectic and I’m good enough at it that I produce good enough results without killing myself and I can get away with an occasional afternoon on MN 😬😬😬

It sounds like your OH has no stake in your current house, but half of this flat? and you want to sell the flat to pay the mortgage on your current house- will OH then get a stake in that house? otherwise he may not want to sell. One other thing to consider is that having the London place gives you options later in life, especially for dcs by the time they are students and working. You have plenty of money whatever you opt for.

Apologies in a rush and haven't read the full thread but in case someone else hasn't already asked: realistically is the flat going to keep going to up in value? It must be in a very desirable area. I also have an investment property (worth a fraction of yours) and it's had 50% capital gains but has been stagnant for 5 years we think it's time to sell up.

If you wait and sell it when you retire yes it will almost certainly be worth more in 20 years but after CGT is it going to change your lifestyle radically? What kind of retirement do you want?

What if either of you develops ill health and you end up having a quieter easygoing retirement - you might regret not having had the extra funds to do big once in a lifetime trips (safaris, etc) in your 40s and 50s.

Alternatively can you sell in a year once your husband has found a p/t (3 days a week?) job to hedge against losing future capital gains on the flat and cover childcare costs?

I'm not sure i'd be happy with selling a huge asset like that without a plan on how my partner was going to get back into work. You are both young but the children won't need a full time stay at home parent for long

We are high earners (about the same)

Sell the flat London property is going no where but flat or down and incentives are all but gone on rental.

The money would be better in investments.

imo Your dh is either willfully ignorant of finances or just wants to keep your nose firmly pressed in the mud... for what???? To what end?

You have one life and he wants you fighting to stay above the breadline in a demanding job with 2 small kids while you have almost a million in the bank and he doesnt even have a job ????

Sell. The. Flat.

What % return are you making annually on rent on your London property(net of any related expenses?) vs the capital you have invested?

Ignoring potential capital growth in London, I think rentals these days have a pretty poor % return after knocking off expenses and time. Personally for me I'd rather invest the capital into equities and have much less bother/work. Prioritising each persons ISA allowance and then knocking some off the mortgage.

But yes, I'd be wanting to do the same as you in this situation.

Hi @preparingforthepileon . If your DH is so focused on the future then tbh he should be looking to generate an income that could be invested rather than not working, it’s great he’s taking the time out to look after the kids but he should still do some consulting or have a side hustle perhaps if he wanted to. I don’t mean this badly but that sort of thinking could be spun that he’d rather the marriage had high sets so there is a bigger pot in the event of a separation, whereas standard of living would not net n improvement in that respect- I’m not suggesting he isn’t committed, just men tend to think more this way naturally, even if subconsciously.

Property taxes re likely to increase, I’d sell it, look to invest the proceeds to generate an income and/or locate a strict monthly payout and enjoy your life. It’s not like you’ll be penniless in old age otherwise and you work too hard to not take the benefits where you can.

I think I am on the sensible side of normal whereas my DP is unusually focused on doing the right thing for the future and he’s terrible at treating himself.

That's where YOU come in, OP! I'm a bit like your DP, which is why I married someone who shows me how to have some fun in life. I hope you can persuade him to open that pot of jam and spread it nice and thick!

We could / would change the deeds when we pay of the mortgage - I am 100% sure that is not what is concerning him. He's very relaxed about our finances and has already contributed a chunk (about 200k) to the deposit of our current home and has no stake in it. It was just easier for him not to be on the mortgage as he isn't working.

The 'stake in the London property market' is one of the reasons that he is reticent to sell. I'd love to keep a property in London but it just feels like a big compromise.

realistically is the flat going to keep going to up in value? It must be in a very desirable area.

This is the million dollar question 😂

It's in Hampstead so a solidly good area. It's also a good flat in a good location (as in a good part of Hampstead) but I'd say the value has been flat for a couple of years.

I'm not really thinking too muck about retirement. I'm contributing well to a pension. he already has 500k and that will continue to grow for the next 10 years regardless of further contributions. So I think we will be ok. I'd like a slightly nicer life now and my view is that we can regroup in a few years to look at him returning to work and what the next 'phase' looks like.

imo Your dh is either willfully ignorant of finances or just wants to keep your nose firmly pressed in the mud... for what???? To what end?

He's just used to living frugally. He had very little growing up and so he has low expectations of day to day spending. He's not unreasonable about it and is happy to accept that he needs to adjust but that is certainly his default.

Haha - yeah, he recognises that as well. He knows that his default is not always the right course of action.

Fair enough
i find this is all very incongruent...

Given this mindset of his... it's rather surprising he is happy to just not work.

Your reply also begs the question "why post?" If he is so very reasonable and happy to 'adjust his default'.

I just can't get my head round how you can be in a position where you have a net worth of x million with a husband who is happy bringing in zero income while pressuring you to "jam tomorrow" to the point you feel you cant fund flights to visit your own family WHILE declaring your husband is lovely and everything is rosy in your marriage...which is the situation you seem to be in.

Re hampstead
Anecdotally the 4 or 5 people i know there who bought post 2018 barely wiped their faces on their places...

Out of interest would you find it so incongruous if I was the one not working? We decided as a family that one of us should give up work and we discussed which of us it should be. We earn similarly but I like my job more, it’s also less stressful so I am able to be more present for the kids than he would be able to be. He sees a value in one of us being at home with the kids so he is happy to forgo the income (or would have been happy for me to if that was what we agreed). His attitude is not ‘more money at all costs’. All that being said, he is comfortable having a reasonably frugal lifestyle (and that is the case when he is working too) so he’s more inclined to be satisfied with less today and to keep it ‘in the bank’ so to speak.

As for why I’m posting - he’s happy to look at himself but I am too. I was expecting to be told I was being reasonable but equally I am prepared to accept that I may have been wrong! We all have our perspectives and I was curious to see if perhaps I was being more reckless than I thought.

we bought the flat in 2019, it was a probate sale, the market was dead (we had all the no-deal shenanigans of the Brexit aftermath in parliament) and we paid 900k for it. It was well looked after but unfashionable. We decorated and replaced a bathroom so we’ve spent about 15k on it.