Suggestions for Cash buyer with budget of £100k

[onlychildhamster]

Asking for a friend. A friend of mine (in her 40s) has been made redundant and therefore can't afford to rent in London anymore. She also has depression and is thinking of buying a place in cash, as she has 100k in savings from her divorce settlement which makes her ineligible for benefits. Given the budget (and probably because I am biased as a London flat owner), I suggested a 1-2 bed apartment in a place like Manchester or Edinburgh (I found a few examples) where she can probably find work easily and get around easily (as she doesn't drive) but she is looking for a 4 bed house in Sheffield cos she wants to either rent out rooms for income or get a live in carer who would help her in exchange for free rent .I did look at rightmove and there were houses in that budget- is there any catch, are those areas rough i.e. www.rightmove.co.uk/properties/111278462

I wonder if anyone in Mumsnet would have any insight- what is best for a low income individual/individual on benefits with depression- a small flat or a 4 bed house. I was thinking that a bigger house might be harder to manage esp as she has depression and may have more repairs.And there is no guarantee that you can find a lodger/willing carer. Her gripe against a flat is high service charges but there are flats that don't have high service charges and surely bigger houses also require money for roof repairs etc. What do you all think?

@Seasonschange she worked in admin/events for a charity.

@snowspider she likes yoga and meditation and baking. Going to charity shops. She has a lot of interests and is really lovely to be around when she is able.

Has she actually got 100k in cash after taking moving costs/legal fees, etc. out or is it going to be more like 95k?

You could get something that needs work for about that price in Blackpool. Won't be in the best neighborhood though

It is very scary to experience severe episodes of depression and I imagine she is fearful when it will strike again. However, she is young and has the prospect of many years of a full and rich life ahead. Focusing on a realistic plan while she is motivated is a very good thing. Taking steps back into work via volunteering might help her. Now things are opening up again she could volunteer in a charity shop for instance. A regular commitment would be stimulating and boost her confidence and self esteem.

It sounds like she basically needs to get rid of the £100k, would she consider buying a house/flat somewhere cheap like South Wales/North East and renting it out so she can keep renting in London?

[quote onlychildhamster]@emmathedilemma I was thinking something like this: 2 bedroom flat for sale
www.rightmove.co.uk/properties/109413980

My SIL lives in Prestwich, and she doesn't have a car and she loves it.[/quote]
Have you seen the dimensions of the bedrooms? They're so narrow I suspect it might have been a 1 bed flat that someone's divided into 2. Or if it wasn't I'd definitely be taking the partition wall down or you'd barely get anything other than a bed in.

@onlychildhamster No I appreciate she couldn't buy in London for that.

maybe I am being really naive here but wouldn't there be someone willing to cook, clean and do some simple chores, help her out for reduced or even free rent?

No, I don't think so. Birmingham is my closest big city - Rightmove shows a couple of large double rooms for rent in nice streets for £450... You'd get such a low amount of chores or care for that. In Coventry, you can rent for £250 - 300 a month with bills included.

And the legal position for being a lodger that pays no rent would be complicated on both sides. I know that's overlooked in London because prices are so crazily out of reach for most people, but it's not anywhere else that I'm aware of.

It's lovely of you to be trying to help her, but it sounds like a pipe dream. She can have the live-in carer, in all likelihood, if she stays in London - if she has to leave, she's likely going to have to pay for any care that she needs, and a lodger won't be reliable.

Is learning to drive at all realistic? I'm wondering about villages and more rural places, but if learning to drive isn't an option, that's probably not realistic.

Would she qualify for supported living? You have to be over 55 where I am, but depression can be a qualifier, and here she'd only really be able to rent, but I presume you'd be able to do shared ownership in some areas on similar schemes... That might be an option? I think the terms of each scheme vary, so she'd need to look into how much care is provided or how much it costs, etc.

I'll keep racking my brain.

@TakeYourFinalPosition She just told me that she just needs someone to make sure she eats so not anything overly onerous... Due to covid, i have been talking to her online most of the time. And she tends to want to meet up when she is feeling better so I see her at her best. I know that when things are bad, she stays in bed for days...

She could get a reasonable terraced house in Carlisle (or further down the coast) for £100k. But I think she needs to disabuse herself of this idea of some gentle-hearted student agreeing to take care of her in return for a spare room - as others have said, it only really works if you live in Primrose Hill, plus it puts her in a very vulnerable position, mentally and physically. What if she ended up with someone abusive? Or someone she just didn't get on with? It's a potentially nightmare power dynamic.

It's maybe equally pipe-dreamish but can she research an area that has strong mental health support networks and/or groups that she could see herself joining, and/or and focus her house hunting there?

If the only care that she needs is someone to make sure she eats, I think people are being overly pessimistic about finding someone willing to take on the role. I don't think it would be hard to find someone in a university town who, in exchange for a rent free room, would be willing to cook and clean, things that they would have to do for themselves anyway. Perhaps a post grad or clinical years medic - there is less funding for post grad studies so rent free accommodation would be more attractive and they will be more mature.

She could rent a well located London flat on a sole tenancy, offering to pay six months or a year upfront. And getting permission from LL to take a lodger. For example this one:

www.rightmove.co.uk/properties/110398997#/?channel=RES_LET

(Maybe a mental health nurse given the location!)

A lodger won't want to pay 50% of the actual cost of the rent/bills. They would likely pay £700 for a room in South London so the other £1300 would be on her. (Bills average £300/m without penny pincing).

Then when years down the line she runs out of money, she can claim universal credit at the 2-room rate (since the flat isl solely in her name). If really depressed might get signed off as having limited capacity for work. And lodger income will be disregarded/ignored for the purposes of her UC claim so she can use it to pay bills and subsist. Hopefully by then she'll have bought any big ticket items she wants out of the £100k anyway, and done this slowly enough that it isn't seen as deprivation of income.

That way she gets to stay in London with access to London's support networks/other mad people/ageing singletons.

This depends on the landlord/agency going along with her plan. It could happen but it's most likely if she can find a landlord to rent from directly. Maybe there's one reading this now....

I wouldn't explicitly ask for any special duties from such a London lodger. Charge them the correct rent for the room and location. Just pick the right person (which should be possible with the right London flat) and she will be helped to some extent by living alongside someone young and functional who's following a regular routine.

As I said this depends on finding a landlord who'll let sign a fairly desirable 2-bed flat over to her but it shouldn't be impossible.

The problem with buying a (large) house, especially after being used to renting, is the ongoing maintenance costs. There are so many things that can go wrong, as well as just general maintenance, and even things like the annual boiler service, buildings insurance etc. Would she have several thousand pounds to spend if the boiler stopped working, the roof started leaking or something else like that happened?

It's such a difficult situation. £100k is a huge sum of money and yet not much at all when it comes to buying a property.

@nordica She was a homeowner before of a large 4 bed house in London so I am sure she knows. She was married to a high earner but i think she only got 100k cos (a) no kids, and (b) probably not much equity in that house as they were on an interest only mortgage when they ran into financial difficulties after buying that house. When I first met her in 2017, she still lived in that house, and she told me that it had lots of issues that they couldn't really afford to fix until much later. But they still survived, the only problem was the marriage falling apart as her ex was really quite an awful man.

I have a friend with mental health issues who does very well letting out 2 rooms in her 2 bedroom flat. She is a sociable disposition and being a live in landlady suits her. If your friend buys a 1 bedroom flat with seperate kitchen and living room she would have the option to let out the living room as a bedroom if she wished.

Even if she can't work she would then be able to claim benefits, some aspects of service charges are eligible for benefits. My previous flat was housing association and the entire service charge was eligible for housing benefit.

I think the idea of using the money to buy a property to live in instead of watching it all get used up does make financial sense. Another option would be to buy a shared ownership property if you can find one where she is eligible, and is allowed to claim benefits for the rent, that would be difficult but I have heard of schemes which allow that. Or homewise worthing sell properties on a lifetime lease at a discount.

How about this studio flat folkestone is a lovely community and only 53 minutes from st pancras.
www.rightmove.co.uk/properties/111595799?utm_campaign=property-details&utm_content=buying&utm_medium=sharing&utm_source=copytoclipboard#/&channel=RES_BUY

@starpatch thanks so much for that property you found :) I think Folkestone would suit her, she is quite hippy.