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Buy the house or keep the cash ?
dimple_pie
Posts: 26 Forumite
Looking for opinions please:
We own a leasehold property (apartment) worth approx 200k and have no mortgage.
We have cash savings of approx 240k and are both in employment, we’re in a position to save around 8k per year. Most of our savings are at 1.5% (cash ISAs and savings account).
My idea was to maybe use some of the money to “upgrade” to a “better” property, preferably freehold. Seen a new build house that would represent a decent upgrade, sellers will accept 285k
Planning to do a cash purchase to secure it. A family member has effectively given me a private “bridging loan” so that I can evidence funds for the cash purchase, the idea is I simply transfer it back on sale of our current property, I’m aware of the increased SDLT for potentially owning two properties even if for a short period.
We both like the new house - it would give us more space, some outside space and the spec appears very good. However neither of us dislike our current place - we’ve been here 16 years.
However I’m now thinking is better to hold on to the cash ? With fees etc we’re probably looking at 100k of our cash gone (285 - 200 + fees / expenses / SDLT). That’s best case scenario on the assumption we achieve near the asking price on our place and it doesn’t take too long to sell.
I’d like to retire in about 8 years but wouldn’t be able to draw my first (modest) work pension until two years later (without reduction). So my idea was to use the interest on our savings to supplement my income - I’m assuming interest rates will rise ! My wife is a 5 years younger would maybe go part time for a period.
So, buy the house or keep more of the cash ? Would be interested in your opinions. Thanks.
We own a leasehold property (apartment) worth approx 200k and have no mortgage.
We have cash savings of approx 240k and are both in employment, we’re in a position to save around 8k per year. Most of our savings are at 1.5% (cash ISAs and savings account).
My idea was to maybe use some of the money to “upgrade” to a “better” property, preferably freehold. Seen a new build house that would represent a decent upgrade, sellers will accept 285k
Planning to do a cash purchase to secure it. A family member has effectively given me a private “bridging loan” so that I can evidence funds for the cash purchase, the idea is I simply transfer it back on sale of our current property, I’m aware of the increased SDLT for potentially owning two properties even if for a short period.
We both like the new house - it would give us more space, some outside space and the spec appears very good. However neither of us dislike our current place - we’ve been here 16 years.
However I’m now thinking is better to hold on to the cash ? With fees etc we’re probably looking at 100k of our cash gone (285 - 200 + fees / expenses / SDLT). That’s best case scenario on the assumption we achieve near the asking price on our place and it doesn’t take too long to sell.
I’d like to retire in about 8 years but wouldn’t be able to draw my first (modest) work pension until two years later (without reduction). So my idea was to use the interest on our savings to supplement my income - I’m assuming interest rates will rise ! My wife is a 5 years younger would maybe go part time for a period.
So, buy the house or keep more of the cash ? Would be interested in your opinions. Thanks.
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Comments
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In your place, if I was happy with the current flat, I wouldn't move. But that's down to personal traits, as I am (at least in my mind!) a semi-minimalist and wouldn't want to upgrade to a "bigger place" if I didn't need it.0
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Thanks for the reply. We don’t need the extra space as we seem to have got by for so long without it but it would be nice to have increased internal room and some external space, although appreciate the latter isn’t that usable for lengthy periods of the year in this country ! The move to freehold is kind of appealing too.0
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Thats a tough one! Are you definite that you'd be staying in the area you are at present on retirement? I think I'd be tempted to go for the house but £100k (and no stress of moving, newbuild issues) would make me ponder what else I could do with the money.0
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Yes pretty sure we’d be staying in this area. Exactly my dilemma ! Keep thinking of the stress, snagging and “loss” of 100k liquidity.0
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I think it depends a bit on how good your pensions are - plus how much use you would make of a garden. For people who love gardening it seems to be worth a huge amount. I don't like gardening so not convinced!
I'd wonder about spending some or all of the money on some type of holiday home - possibly a static caravan - and really get some value of the outdoors.0 -
Pensions expected to be very modest which is the big factor for me.0
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Ah - I''m very inclined to keep the £100k then. Nothing to stop you moving in the future if it suits - there are other houses I guess (unless this one is very special?)dimple_pie wrote: »Pensions expected to be very modest which is the big factor for me.
Reasons:
- £100k is a lot of money.
- it doesnt read like you've been sticking in your current place desperate to move.0 -
No, not desperate. We like our current place but in some ways the new place would be a definite upgrade but not in every aspect. We would be compromising on outlook compared to our current place for example. But new place a house not an apartment, more space, etc etc..0
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There are a lot of great investment around. It's all depend on your preference. We invest our into Real estate because we don't mind deal with (3T) tenant, toilet and termite.0
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You mention that you'd like to buy your next property with the freehold but you don't state if this new build property is leasehold or freehold (or share of)?
AFAIK nearly all new builds come as leasehold properties."If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett
Save £12k in 2025 - #024 £1,450 / £15,000 (9%)0
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