Saving for a house without using mortgage

[iniquity]

After years of having no money at all we are finally in a position to save around £1500 a month. We would like to save for 9 years and then buy a small property without a mortgage. Does anyone know the best place to put this money? I've looked at house buying and lifetime Isa and you can only use them if you will need a mortgage. We don't want a mortgage for religious reasons.

Thanks

chocoshopoholic Thanks for the info.
As before a farce.

If you don't want a mortgage for religious reasons then I am guessing that you also won't want to invest in conventional stocks and shares either?

I believe some fixed bonds that comply with shariah principle are available, offering nearly 2% currently. You need a specialist provider though, HSBC pulled out of this market about 5 years ago and I don't think any other high street bank offers these products.

I dont understand your comment about getting interest for yourself, sorry.

You have internet access. It would be quite hard to be unaware of what house prices are doing generally and in your area. ( not everywhere is London).

And no one is immune from redundancy, and certainly not from sickness or other issues which can stop you working.

Savings are good, everyone should have six months worth,but I don't think the plan makes sense for house buying.

Your plan depends on your area, in many areas house prices are not back to the 2007 2008 level so thats 10 years just there, i know some savers that could stick to that plan espescially if your rent is low and fixed and long term, which is what it sounds like.

9 years isnt actually that long. Many people would never forgo a certain standard of living to save but if you can have a life of your making and still save then thats fab.

Even if you missed a few months here and there you could still have 150k which is enough in many parts of the uk and may still be enough in 9 years time.

I would also look for sharia compliant mortgages and do your figures and work out which one is financially best overall.

What I meant special was that I get interest with my bank account but my husband has asked his bank not to give him interest. I'm presuming that interest is still generated on his bank account but the bank receives the money instead of him. Since the money acquires interest automatically I would rather keep the money myself, because the 'sin' has already been committed if you believe interest is sinful.
Many muslims of course have mortgages because they feel it is a necessity and therefore not sinful.

I don't think house prices will go up automatically in our area but again it is a gamble, but taking out a mortgage when interest rates might soar is also a gamble.

Thanks flirtygirl I don't think house prices in our area are too different to the 2008 price but I will check that out too.

Could you husband donate the interest to charity. At least the bankers wouldn't get it.

Ah, I see, thank you. There are plenty of zero interest bank accounts. In theory they do earn interest but I doubt it even covers the bank operating costs - free banking is a rare thing and its days are probably numbered.

As an aside, as the sum grows make sure you are aware of the fscs banking guarantee limits.

Make sure you’re well able to document where your money is coming from. Stashing cash under a floorboard not recommended. International money laundering laws means you can’t rock up with a suitcase of cash to by anything.

Areas can really change in nine years OP. New transport links or a big factory opening or closing can affect the price of property in an area hugely.

Perhaps you could buy a very small property outright after 5 years and rent it out? You might get to your goal more quickly and you would get any house price increase too.

Have you added all the extras you would need to pay to buy a house eg stamp fee, solicitor fee, land registry, survey, moving costs, other costs that appear, emergency money for unexpected things that happen. So you would need to save for more than 10 years.

You can buy property and other items by auction, there are extra fees related to this method of purchase too