House savings

[Darbs76]

Hi

I am saving for a house. Single parent and living in the South East so will never be able to buy here so plan is in 6yrs to head back to my native North Wales once my youngest is 18.

This isn’t a huge sum of money but I’d like some advice - I am currently living rent free (living in my ex’s home whilst he’s overseas) and so can save minimum 15k a year. My plan is either to buy in 3yrs so I should have 45k deposit or in 6yrs - with a 90k deposit. I’m hoping to get a promotion in the next few years too, so if I do then I’ll have more money to save.

Where is the best place for my savings. I have 6k at the moment to start with, but obviously it will grow monthly. I’m happy to have no access for up to 3yrs but after that I’d like to have access incase I decide to buy.

Any help appreciated. Money currently in a HSBC ISA. I’ve got no experience of savings.

I should have added I don’t qualify for any of the Government schemes as I’m over 40 and I’ve owned a property in the past.

you have a big problem as no cash savings account pays above the inflation figure, let alone anywhere near real inflation which is about 3% or more. Government policy hates savers and has done for over a decade.

the alternative is a stocks and shares ISA but obviously not risk free, the FTSE dropped 3% this morning. Long term you could do well, yo may not.

best cash ISA I can see today is 1.7% for five years.

Timescale is the important thing. 3yrs then you are using cash products which won't get much interest at all.
6yrs you could risk investing in a stock market tracker, as usually in that time period you would gain more than you lose but it's a risk. Something like a Vanguard Lifestrategy 40% equity fund perhaps, so there is good diversification but risk is on the cautious side as fund is 60% bonds/gilts.

You may want to lower risk further by having some in a fund and some as cash.

Nothing is risk free... you risk cash being eroded by inflation. You risk stock markets having a large correction which can take years to recover.

Given your age, wouldn't it make sense to buy as soon as you can. If you can save fifteen grand a year then you can easily afford a bigger mortgage.

Yes I’d buy next year only I can’t afford to buy where I live. And I can’t move until my youngest leaves school in 6yrs - so the options are I buy in say 2yrs when I’ve got 30k deposit but leave my property empty apart from half terms. Or get a buy to let mortgage.
I can afford a bigger mortgage but they won’t let me borrow enough to buy on my single salary in the south east. So I’m kind of stuck. If I put in 2yrs I’ve then got to pay the bills on a house I can’t live in much.

I have a good pension and I can get a 20yr mortgage as I did worry about getting a mortgage later. But I’ve been told it’s not a problem. It’s a tricky one.

Thanks for the advice. I’m going to investigate those things. I’m aware there’s little out there to help me, hence asking. But might be some options. Thank you