Just paid off mortgage but what next?

Isatou

I'm just about to pay off my mortage, which is great, but not sure what to do. I'm in an unusual position - we rent a farm from the local authority, which requires us to live in the house that goes with the land and buildings, but we also own (at last!) a house in which my mother-in-law lives. We have signed an agreement whereby she can live in the house as long as she likes, (an ex-local authority house that she took out the original mortgage on) but in 10 years my husband will retire and we will have to leave the farm. The house she lives in is worth approx £200k, but we would be looking to buy a house for around £300k at todays prices - and if she still wants to stay in the house in 10 years time we will be in trouble! But, assuming that she doesn't, and the house becomes vacant, what do I do - try and buy another house (I'm 51 and can afford to pay £1000 per month in mortgage from my f/t job) with the aim of selling both houses when my husband retires, or where do I invest this money for the next 10 years?

Gobosly

Tricky situation and probably one in which no one can give definitive advice.

However the golden rule with any investment is not to put all of your eggs in one basket, and that includes the housing market.

It is impossible to say for sure, but the housing market may have peaked, or if not is unlikely to see the level of growth seen in the last few years. Because of this and because you already have a property there is probably no reason to go and buy another house yet.

I would invest in a mixture of cash and equity ISA's (should be 12K a year between you and you partner). This way you will always have instant access to your cash at anytime should you need it, but will have 50% access to stock market growth potential over 10 years which is likely (but not guaranteed) to exceed house prices over the next ten years.

It's a bit boring, but probably the most sensible thing to do!