What's the worst that could happen?!

jamescredmond

re the advice 12 -18 months investment.

split the £100k 3 ways and look at the high-end safe products ( icesave, kaupthing edge, ICICI ) long term deposits paying interest monthly.

if your mum is liable for tax at the standard rate, the returns should equal £400 p/m.

take the advice offered earlier and use the cash to subsidise you bro's rent.

look at the market again 18 months from now.

you know it makes sense.

lostinrates

neverdespairgirl wrote: »

If I were buying a studio (which I wouldn't!) I'd go for one in central London, definitely. Bloomsbury, Holborn, Camden, that neck of the woods.

.

as I've said before, we might buy (or rent) a studio in the furture, and I agree with NDG's assessment. The point of people with good incomes for rent of having a studio in London is to have somewhere close to work to sleep in but close enough to be central for suppers/events etc should they need to be.

As a side note, DH lodges in zone 3 ATM and we have realised this is a mistake....next time its got to be more central. He would be your mother's potential tenant and I KNOW he wouldn't go out to Wimbledon (village or otherwise).

Is that transport thing the reason I've always driven to Wimbledon then? I thought that was ridiculous of me but now I wonder if its more telling?

carolt

sliding_doors wrote: »

Thanks for the comments. I agree with chewmylegoff that a weekend looking is more than a hasty decision (I think it might have been two weekends though but certainly only 4/5 properties!).

In response to my brother moving (probably in about 5 years): Ive only just moved down here and don't know London very well but their argument is that Wimbledon Village (the location of the property) is a 'highly desirable area' and they will always be able to rent to some young professional as its in such a good location. So even if my brother does leave etc. renting will not be a problem and hopefully at a price that will more than cover the interest.

Added to that apparently Wimbledon Village is so desirable that it will be shielded from property decreases and it will always sell.

I know how all this sounds and although I don't know much about the area on a general level I think investing in property before the end of the year is just too risky. However, pursuading my mum to wait is much more difficult and I need the facts to back up my arguments.

Any ideas how to pursuade her? (She has already made an offer and is waiting!) :mad:

Sorry - not read the whole thread but am in utter shock that anyone would be mug enouh to spend 200K for a studio in Wimbledon!

My brother bought a 4 bed Edwardian semi 2 mins from Wimbledon station on lovely road in 1989 ish for 180K. 4 years later it fell to around 150K. At the peak it was valued for around 950K. But is it 'worth' that? No way? Prices in Wimbledon fell in the last crash - lost 20% ish as my example shows - and prices then had risen far less far than now. Fail to see how a studio in Wimbledon can be worth more than 100K.

If your mum doesn't mind taking a 50% hit on her property then fine, that's up to her, but she shouldn't make a decision based on that price being likely to hold or indeed be returned to for many, many years.

Laughing_man

In fairness, if you risk 200K on any venture and are breakeven after five or (more likley) ten years you will be significantly ahead of most investors in most markets. go for it imo.

Is it overall a good idea to invest your entire net worth in a falling asset class- usually no.

sliding_doors

Laughing_man wrote: »

In fairness, if you risk 200K on any venture and are breakeven after five or (more likley) ten years you will be significantly ahead of most investors in most markets. go for it imo.

Is it overall a good idea to invest your entire net worth in a falling asset class- usually no.

Is this the first person to say anything good about the investment (or is he being sarcastic?!)

Either way, Im happy to report that my mum's offer of £200k was rejected (they want 210k). Fortunately, she has taken the opportunity to back out of this one without losing too much face!

Unfortunately, she is going to continue looking for studio flats for my brother (not sure where though - some of the above suggestions may come in handy). So my next task is to persuade her to wait a bit and meanwhile put the cash in a savings account.

I have to say that without all the above advice, I think she may have offered £205k, so thanks to everyone :T

MrMonkey

sliding_doors wrote: »

Either way, Im happy to report that my mum's offer of £200k was rejected (they want 210k). Fortunately, she has taken the opportunity to back out of this one without losing too much face!

:shocked:

Wait till they call back in a month's time and offer £150k.

ad44downey

no, don't offer a round figure, offer something like £148, 475

BettiePage

sliding_doors wrote: »

Is this the first person to say anything good about the investment (or is he being sarcastic?!)

Either way, Im happy to report that my mum's offer of £200k was rejected (they want 210k). Fortunately, she has taken the opportunity to back out of this one without losing too much face!

Unfortunately, she is going to continue looking for studio flats for my brother (not sure where though - some of the above suggestions may come in handy). So my next task is to persuade her to wait a bit and meanwhile put the cash in a savings account.

I have to say that without all the above advice, I think she may have offered £205k, so thanks to everyone :T

Phew! Lucky escape.

The vendors obviously didn't see yesterdays news about stamp duty threshold being raised to £175k, lol.

GracieP

sliding_doors wrote: »

Unfortunately, she is going to continue looking for studio flats for my brother (not sure where though - some of the above suggestions may come in handy). So my next task is to persuade her to wait a bit and meanwhile put the cash in a savings account.

Could you maybe persuade her to investigate the property auctions? The lot I linked to in my first post isn't awful value. So if she is absolutely determined to purchase now going down the auction route might make the best sense.

penguine

If she's really determined on this mad idea -- buying property in a falling market as a long term investment, secured against the family home -- is there any chance you could get her to see an IFA before she makes an offer on another property? They may be able to convince her to do something more sensible with her money.

Sounds like she had a lucky escape (for the time being) -- she might have ended up worse off financially than if she'd never been given £100k in the first place.