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Original poster

What to do with 60k — can’t buy a house

88 replies

Schmapples · 03/12/2017 16:01

Dad has generously put this amount into a pot for me to one day buy a house. The problem is that in London that’s just never going to happen!! We earn ok salaries but London house prices are just mad and I need to be in London for work.

My idea is that dad should get a financial adviser and put the money in a low risk investment fund so that it is safeguarded for the future. It’s been in a bog standard savings account for about 15 years now 😵 so was worth considerably more when ddad acquired it in the first place and now is becoming worth less every year. I’m just aware that even with this money and our own savings it’s going to take us maybe 10 years or more to buy our first place, and i’m worried about the value descreasing so much that home ownership will just be forever out of our reach.

Ddad is a curmudgeonly and risk averse sort so I think will balk massively at the investment idea. But am I right in thinking that this is potentially the only way to future proof this pot?

I have lots of rich mates and they wouldn’t dream of having this amount of money in the bank, it’s all in low risk investment portfolios.

Really clueless about all this stuff so any advice massively appreciated.

OP posts:
GreenTulips · 03/12/2017 16:04

Buy a house outside London and reap the rewards later

Nazdarovye · 03/12/2017 16:05

Yes you can buy a house if you pay the deposit only. Then you either pay the mortgage yourself or put tenants in it who will pay it off.

Original poster
Schmapples · 03/12/2017 16:06

Problem is we need to be in london for work and you can’t get a mortgage as a first time buyer unless it is going to be your residence, or so I thought

OP posts:
nightshade · 03/12/2017 16:07

Absolutely...buy something elsewhere and rent it out...a spare house is always a handy thing to have..

Slartybartfast · 03/12/2017 16:07

Buy gold?

SummerLightning · 03/12/2017 16:08

Yes don't have it sitting in the bank. I would get a stocks and shares ISA and put it into it over 3 years (I think you can put 20k in a year, so you would have 40k in by April). I have all my ISA sat in a worldwide passive fund by vanguard. I am not an investment expert but we did go an see a financial adviser who wanted to charge us a large amount of money to basically do this (invest in passive funds). I just ended up doing it myself.

Original poster
Schmapples · 03/12/2017 16:09

Isn’t being a landlord a massive hassle though? And expensive to keep up with the repairs? And is property always a better investment than a low risk fund? We’re just looking to retain the value of the money rather than grow it massively, so a conservative investment fund would suit us well.

OP posts:
GreenTulips · 03/12/2017 16:13

You get a managing agent and keep a repair fund

Last 7 years we've had a repair to the boiler £100 new fencing £400 new back door £90 inc fitting some small electrical work due to a faulty light - some redecoration which is just paint and as kids rooms they're choice rather than necessary - it's not £000's unless your unlucky

NeverTwerkNaked · 03/12/2017 16:16

There are plenty of places within an easy commute of London where £60K would be a sizeable deposit for a reasonable starter home. Can’t you commute into London?

PersianCatLady · 03/12/2017 16:18

You say you want to buy a house but you don't seem very receptive to some of the ideas that people have suggested, is this why you haven't done anything with this money for so long?

endofthelinefinally · 03/12/2017 16:20

That is loads of money. You could get a buy to let mortgage on a nice house outside London, get an agent to manage it and have an income from it.

Original poster
Schmapples · 03/12/2017 16:26

I haven’t done anything with the money because it still belongs to my dad! He’s let me know that he will help me with the deposit for my first house when I need it and me and my partner have only just got to a place in our life where we are beginning to look into buying seriously, and now we are we’re realising how out of reach it is for us in London, even with our ok salaries and this amazing gift from my dad.

We’ve looked into buying in Brighton but the commuting costs into London make this unaffordable for us.

Just had a quick google and it looks like getting a buy to let mortgage would be tricky but not impossible. Something to think about. HOWEVER we really are just after somewhere secure to live. Not sure how I feel about becoming a landlord and having someone else pay my mortgage for me just because they’re not lucky enough to have had help with a deposit like me — this is exactly the chain of greediness that has led to London becoming impossible to buy in.

OP posts:
SummerLightning · 03/12/2017 16:28

I wouldn't get a buy to let, if, as you say, you are not confident and don't know what you are doing. I don't think you're guaranteed to make money once fees and maintenance is taken off.
But if you have a decent salary surely you should be able to find a house somewhere commutable to London you can afford?

SouthWestmom · 03/12/2017 16:30

Don't get a buy to let!

So you'd have a mortgage on that and rental income would cover the mortgage, repairs and agency fees.

Then you'd still be renting in London.

Honestly that would be nuts.

But a house outside London and commute in. Then you have a foot on the ladder and who knows, you might find different jobs not in London. If you are only on ok salaries it's not like you need to work there for the pay.

ImAMarshmellow · 03/12/2017 16:32

I alive in the north east (close to Darlington) you can easily buy a new build 3 bed in a nice area for £120k. You could use the money as a decent sized deposit, then sell at a later date.
Non new build in my area are roughly 80k for properties built around the 50's/60's and a slight older estate (built mid 90's) will cost about 120k.

You can get an estate agent to manage to property and as long as you sort out the correct insurance you should be fine. I think it's when people don't get the basics sorted rentals can be hard work.

Your alternatives are probably stocks and shares.

At the very least ask your dad to stick it in an isa. Interest isn't much, but better than nothing.

travailtotravel · 03/12/2017 16:33

£60K is a 10% deposit on a £600k house. You can buy a house in London for £600k that is commutable.r Can you afford the mortgage on a £600k house?

Original poster
Schmapples · 03/12/2017 16:33

I haven’t found anywhere yet! Commuter towns are expensive to buy in and once they are affordable the train costs are sky high.Commuting is awful anyway. But if anyone has any suggestions let me know... not keen on shared ownership either

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Nazdarovye · 03/12/2017 16:34

Not everybody wants to buy (for various reasons) so they prefer renting. Being a landlady or landlord is not greedy, it is a means to invest and make some money.

whattoweartomorrow · 03/12/2017 16:35

What do you mean by an ok salary?

If you're both on, say, 35k (a lot outside London, not so much inside) then a bank would lend you up to 245. That plus 60 gives you 300 plus solicitors fees, and you can get a decent flat within London/decent commuting distance for that.

How much is your rent now? It is possible to save a good chunk of money in six months if you're able to cut back and live on one salary. We were paying rent if 1300 and living off a salary of 2000 for a while- not a lot of fun, but manageable.

Brighton is a v expensive, not fun commute. If you can afford to live in Brighton, you can afford to buy in London.

endofthelinefinally · 03/12/2017 16:35

Sorry op.
I missed the fact that you are renting.
There are commutable places outside London where £60k would be a great deposit.
Chesham is lovely and prices are reasonable. Has the advantage of being on the Tube.
Or Hertfordshire. On the main line into Kings Cross.
I would be getting on with it rather than paying out more rent.

titchy · 03/12/2017 16:38

Well what's your and your dp's salary? Agree with others unless you're on minimum wage you CAN afford to buy somewhere with £60k as a deposit. You'll need to make sacrifices in the short term but will reap the rewards longer term. You don't seem that keen though...

Original poster
Schmapples · 03/12/2017 16:39

Haha no definitely not travail!! How I wish that were the case... we can afford a property value of £250 realistically right now.

I really, really love my job and I know how rare that is so not keen to give up the industry I work in presently. Salaries tend to be low but can be very high later on, but we’d like to have kids soonish (in several years) and would like to have housing sorted out before that.

OP posts:
Original poster
Schmapples · 03/12/2017 16:41

I earn 27k and DP earns 32k. I will look into Chesham, thank you v much

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G1ggleloop · 03/12/2017 16:46

You need to head east. You can easily get a two bed flat for 200 if you look in Romford/Dagenham in Dagenham you'd probably even be able to get a house. Granted they aren't the most glamorous places to live but if you chose carefully you can find somewhere in the not so rough parts.

RavingRoo · 03/12/2017 16:49

You can buy 1 bed flats within 30mins commuting distance from London for 80k. 60k if shared ownership, then rent out. (bedford, Milton Keynes, Luton etc).