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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:
Original poster
Schmapples · 03/12/2017 16:50

I don’t think they allow you to sublet shared ownership places? But I will look into Dagenham, thank you

OP posts:
RavingRoo · 03/12/2017 16:50

Bletchley or Bedford you could probably get a whole house for 100k if you don’t mind a 2 bed in a slightly dodgy area - but remember dodgy areas up north are safer than the safest areas in London.

RavingRoo · 03/12/2017 16:51

They do. Need permission from the letting agency. They often just want to veto Council tenants.

G1ggleloop · 03/12/2017 16:53

If you're looking at Dagenham you need to be closer to Dagenham East station than Heathway or Becontree. I lived in Dagenham East for a few years as it was all I could afford and it was fine. Not glamorous but nowhere near as rough as I thought it would be

Madbengalmum · 03/12/2017 16:54

Jees, there are tons of places in the midlands that you could get a great little house with a deposit of £60 and are very commutable for london. It takes my OH less time to get there than our friends who are surrey based.

NumberEightyOne · 03/12/2017 16:55

What about Hastings?

mayhew · 03/12/2017 17:00

There's quite a lot in your budget in Redbridge. It's got good overground and Central line services.

What to do with 60k — can’t buy a house
Original poster
Schmapples · 03/12/2017 17:03

Thank you all very much for your suggestions of other places to buy. The problem is that we really, really like London and want to live here. We could go as far out as zone 4 I think but would be quite unhappy living anywhere else.

I’d really like to future proof this money so that when our salaries have gone up (likely) in a few years time and we can raise a larger mortgage it won’t have dwindled.

OP posts:
sparechange · 03/12/2017 17:05

*but remember dodgy areas up north are safer than the safest areas in London

And prize for the biggest pile of crap on MN this month goes to...
💩

mayhew · 03/12/2017 17:06

Yes, clearly in London we are all dodging maniacs!

NumberEightyOne · 03/12/2017 17:07

Good luck future proofing your money if you are not going to put it into property.

Equimum · 03/12/2017 17:08

We bought outside of London and started commuting. Brighton is both expensive and the commute is king/expensive. There are towns higher up the same line, though, that might be affordable, depending on what you want.

Pootlebug · 03/12/2017 17:15

You could get a 2-bedroom flat in Charlton, Kidbrooke etc zone 3, near Blackheath and Greenwich Park for that kind of money. Not a long commute (depending on where in London you work obviously)

Original poster
Schmapples · 03/12/2017 17:23

Perhaps I should have mentioned this earlier but am nervous of buying a leasehold flat. I don’t really understand how it works but doesn’t the value just drip away as the lease expires?

OP posts:
titchy · 03/12/2017 17:29

No the value doesn't do that unless you buy such a short lease as to be unmortgageable. Anything over 85 years day would be fine. You also have the option to buy an extension to the leashold.

TBH unless you buy you can't future proof it.

So your choice is either buy now, maybe compromise on area. Or rent forever.

mayhew · 03/12/2017 17:42

Get on with it. Buy a decent flat on a long lease near a station. Zone 3-4. Stop renting.

Original poster
Schmapples · 03/12/2017 17:55

Thank you all for this advice -- good kick up the arse to get on with it!

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palmfronds · 03/12/2017 18:08

With a combined salary of £59k and a £60k deposit you should be able to afford something in the region of £355k - you could definitely get a flat somewhere for that. Have you actually spoken to anyone about mortgages? I would really recommend having a word with a mortgage broker and seeing what they can do, you might be able to afford more than you can think. Give John Charcol or someone like that a call - they are expensive to use but they will tell you what size mortgage they could get you and how much the repayments would be before they charge you anything. Then you could decide whether to use them or not.

FWIW I bought a one-bed in Zone 2 three years ago on a salary of £35k and with a £50k deposit. Prices haven't gone up that much since then so you need to stop being feeble and just get out there and sort some stuff out! Also don't worry too much about leasehold, most flats in London are leasehold. Just make sure you check out the service charge, original lease and any upcoming big works before you commit to buy.

counterpoint · 03/12/2017 18:17

Can you buy a holiday home abroad?

Stpancras · 03/12/2017 18:23

What about Bromley? 16 minutes into Victoria from Bromley south. 300k ish would get you a nice 2 bed flat.

JassyRadlett · 03/12/2017 19:23

You won’t get any flats that aren’t some form of leasehold. You might get a share of the freehold if lucky - which means the flat is leasehold, but you own a share of the company that owns the lease.

Original poster
Schmapples · 03/12/2017 19:41

palmfronds according to the mse calculator banks would lend us £147,500 - £207,000. So max property value we could afford would be £250,000 really which makes it more difficult than you imagine. I wish we had a budget of 350k, then it would be easy!!

I had a session with a mortgage adviser through work and even he shook his head and expressed sadness at how difficult it was for 2 reasonably-earning young professionals with a good deposit to buy in London. He basically gave me the same advice as you all have: to leave London!

Some good suggestions on London areas though thank you, I shall look into it.

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Ttbb · 03/12/2017 19:46

I would bite the bullet and commute to London. You can't really afford to live there if you want to own your own house.

NeverTwerkNaked · 03/12/2017 19:51

I think you need to pull your socks up and get on with buying. I kept talking myself out of it for years, as you are, and all the time prices went up and up.

If you want children anyway then a move out of London will not only make housing more affordable, it will also make childcare more affordable in due course

CinnamonStar · 03/12/2017 20:00

You could look into places where you can commute in by coach rather than train. It really can be significantly cheaper, and there are lots of coach companies in Kent, Essex, Herts etc. You usually get a guaranteed seat too.
I used to commute by coach into London- it took a bit longer but was far more relaxing than getting the train - and I could walk to the stop instead of driving to the station.