£300K inheritance / use to buy in London? / or something else?

janecayman

Hi I have had this inheritance money in my bank for nearly a year and am unsure what to do with it. i work and rent a flat i have all i need and dont want a flash car etc, i have no dependents. I rent in london and wandered about buying here (although i wont be here forever) but am scared re talk of a bubble and wasting it all if it popped. if i dont do that im a bit stuck as to what to do with it, i have a 123 acct, ISAs etc

thanks

Archi_Bald

do you have a pension? how old are you? what is your tax band?

SliAbhaile

It's sometimes scary asking for advice. Some might come along and criticise you for 'wasting' the money in a bank for a whole year but I think you've done well to keep it safe so far and not splash it out on holidays and cars.

As Archi Bald says, please provide a few more details and I'm sure there'll be some suggestions for you to chew over.

andrewm1981

Hi,

Strangely I'm in the exactly same position as you, except that I am yet to have the money-another. 3 months for me.

I am currently planning to buy 2 buy to let flats in South London (£100k mine, £100k loan for each one), returning £1000/month each minus £600 each mortgage. Then invest £70,000 in shares, and £30,000 in Santander 123 returning 3%

I'm 33, home owner, higher tax bracket but intend to quit and work part time/start up own company to use my money to have a work life balance! Flats will be pension, although I have about £10k in pot ATM.
Andrew

workingnomad

Buying in London now would be crazy. House prices are at record highs and there is a huge bubble, I wouldn't even buy outside of London!

Interest rates will rise soon so sit on it for a few years and watch people who have over stretched themselves fall into negative equity.

Then wait and you'll be able to pick up a nice repo

planteria

i like the logic, workingnomad, but i'm not sure that it will pan out that way. it is all a matter of supply & demand, and i don't see massive drops coming, especially in prime London.

BillJones

workingnomad wrote: »

Buying in London now would be crazy. House prices are at record highs and there is a huge bubble, I wouldn't even buy outside of London!

Please, don't state your opinion as though it is fact. By any measure, it's hard to justify calling London prices a "bubble", as there is obviously some genuine demand. It can't be compared to Tulip bulbs.

Is it more likely to go up 50% from here than it is to go down 50%, in the next ten years? I'd say probably, but no-one can really be sure.

OP, I bought two years ago, assuming I'd lose money, but wanting to won my own place. It's gone up significantly since then and so, of course, with hindsight, I wish I';d bought somewhere far more expensive.

You need a home, and if you can buy a place in which you'll be happy for the next few years, then you'll also be buying yourself peace of mind.

If you spend it on a place whee you don't want to live, as a speculative investment, then you'll more likely be buying sleepless nights, instead.

I'd suggest getting out at looking at what your money gets you, and working out if you think that you would be happy there for the short to medium term. Base your decision on that. Anything that has a chance of capital appreciation also has the risk of a similar loss, so whatever you do, there are some risks.