Help - really struggling to decide what to do with my property

economic

any advice please?

racing_blue

I'm not sure I have a clear idea of what you wish to achieve. You talked about a lifestyle change, a wish to move and so on. Please can you describe again where you see yourself in 5 years time?

- location London/ other UK/ other non UK
- type of property / basis of tenure
- income sources and security
- expenditure and liabilities

Then you can have my thoughts for what they are worth!

economic

sure

- I want to stay in London ideally in zone 2/3 2 bed flat. I am looking to sell my property and move to a better area although not 100% decided on this - at this stage I am fine living in my area.

- I work in banking earning about £100k gross. I would like to leave my job sometime next year and do something more aligned to my interests - pay will most likely be <£50k. potentially start a business as well over the next few years.

- my normal monthly expenses are around £6-700 plus mortgage of around £500 so £1200 a month total. only debt is my mortgage of which my share is £88k.

- I recently started contributing more to my pension - 16% of gross salary plus my employer contributes 12%. save around £3k a month currently excluding pension contribution.

economic

any advice/thoughts?

economic

I should also mention my parents (who are both 60) have quite a bit of savings (600k cash, fully paid for house, 200k pension) so its likely I will inherit (with my brother) quite a bit which is something to keep in mind.

racing_blue

Money at the end of the day is a tool, to achieve what you want in life. What do you want in life? Living in a flat with your brother may be it. Or maybe something different (you mention starting a business).

There is an extraordinary mismatch between your current expenses of £700 per month and your current income of £100k per year. What is your game plan? If you maintain the same trajectory the end result will be a big legacy for someone when you die.

Your original question - help I'm struggling to decide what to do with my property - what is behind that? Financial motivation or something else? If purely financial I might suggest keep it on. You have already incurred the big expenses of acquisition such as stamp duty and legals. Now it can work for you forever, even if you move out. But if some dissatisfaction with your current living arrangements, a different formula applies.

Regarding ISAs, full allowance each year into S&S ISA and transfer all your cash ISAs into S&S too. Benefit from tax free capital growth and dividends forever. You don't need cash ISAs because you currently have £155K in savings. This is your cash cushion for your next venture.

I sense there is an element of gaming about your financial life. Meaning, your financial position exceeds any of your material needs and so perhaps the game of acquisition is one you like to play? I mean no offence by this, I also like to play that game and one of the advantages is financial security. However suggest do not neglect the opportunity costs.

Good luck in your decisions

darkidoe

Money seems to be the least of your worries here. I suggest reading articles on financial independence on MMM and Monevator.

Once you have gained financial independence, you will have financial freedom to do what you want!

Keep things simple.

planteria

interesting question, with some good replies

my first thought would be 'tidy up'.. fwiw what i would be aiming for would be to Own a Home, Own an Investment Property and Own Equity Investments. there are various ways to get to that from where you are.. but you have a lot of cash, and i would be looking to own what you own yourself, not split with your brother. being able to make decisions on your own could turn out to be very important.

economic

thanks a lot for your replies.


i agree that i should keep things separate from my brother. which is one of the reasons to sell (aside from wanting to move to a better area). however given the replies people seem to be suggesting i hold onto it. my brother actually doesn't want to sell and thinks its a good investment. so the other option is to let it out and buy another however buying another in London at the highs is just too much exposure for me (less so if i buy a 1 bed). i think it comes down to either selling and buying one myself NOW or keeping it (on a 50-50 basis with my brother) and in a couple of years when my fixed term expires i can release equity and let it out on a buytolet mortgage and buy another (however i may not be in a well paying job at the time and so can not borrow as much). i guess it really comes down to where London property prices (and rent) will go from here.


maybe the best option is to wait - perhaps circumstances will change (and even property prices cheaper!).

economic

another option would be in a couple of years to let out the flat and rent somewhere I would like it live. this way i can release equity on a buytolet mortgage, not have too much tied up in property and get to live where I want to live.