Investments and don't buy house

Herbalus

Why start a thread about investing instead of house buying and then not want to talk about house buying?

sounds like you want a medium term investment plan so you can buy a house when you’re more settled and don’t need as much flexibility to live in places you can’t afford to buy in.

zenbuddhist

I agree with Rocksolid. I need to live in London for work (hate working from home, so that's not a long term solution for me). I would like to buy a house but all I can afford would be an overpriced leasehold shoebox, probably with fire safety issues on top, at least that's what you hear on the news - people getting trapped in unsafe flats. It's a glorified tenancy agreement anyway, which loses value as time passes. Putting all your money in a property also carries an opportunity cost.

At my end of the market, in the English system, it's starting to look a bit like a scam. I've found a small place with a very cheap rent close to work.

Investing in a diversified index fund and enjoying a stress free life. Far better than stretching yourself to buy 'something'. Assuming the world is still inhabitable and our civilisation hasn't collapsed I'll be fine in retirement. 

MinuteNoodles

Rocksolid said:

Man, if I reach 60 is fine, who cares about 80... I don't think to retirement, it's a mistake to think about it, I think till I can work, I'll be alive, otherwise no life, in fact you are useful for the society till you work, and that's your life, after you are too old to enjoy, considering always if you are lucky to reach 60 .

I've just hit 49 and all of a sudden I'm massively aware of retirement, how little pension I have, how little time I have to build one up and how long I'm going to be retired so now I'm sinking 50% of my income into a SIPP. I, like many my age, are sat here thinking I wished I'd started thinking about it 30 years earlier and then I'd not be having to put 50% of my income into a pension.

barnstar2077

It sounds to me like you need to find a job in a country that you like.

csgohan4

Life insurance is not an investment, it is an insurance, £100 a month is expensive, how much are you covering for?

Have you considered pension as an investment, tax deductible and tax efficient and employer contributes?
S+S ISA are also useful as a tax wrapper if you have maxed your pension contributions but knowing which fund take own research and reading

https://monevator.com/

Also no shame in moving away from London, I did so and never looked back, financially better off too and can buy a bigger house for the price of a wheelie bin space in London

Emmia

Rocksolid said:

Emmia said:

You don't necessarily need £600k to buy, but you do need to be realistic with what the money you have will get you - that might mean not right in the centre of a city, but instead a train or tube ride away, or perhaps it is a 1 bedroom flat, rather than a 12 bedroom mansion. 

The riskier your investments the greater the potential return, but also the potential for loss.

Look, around Harrow, 600k is not even right, I was terribly wrong, because for 600k that's what I can get, a 2 bed bungalow, old inside and outside, quite pathetic: https://www.zoopla.co.uk/for-sale/details/51151925?search_identifier=db59b07c8f50ef6b3091e7d50f46879a , probably I need 900k for a detached house with 3 bed, garden and private parking.

fred246 said:

You can rent all your life but you need a much higher income in retirement. You don't want to be on the streets at 80 years of age because the landlord has put the rent up and you can't afford it. So it makes sense to buy a property. Property is normally quite a good investment too in the long term. If you want financial freedom and retire early you can buy the smallest cheapest property possible. Whether you are happy living in it is your choice. Most people would want a better property.

I can't buy an house and invest, the down payment will kill my plans for financial freedom of only investments, but yeah, it could be possibly ATM to pay a mortgage and invest as well.

ATM, for example, I have the possibility of only 15% mortgage (covid rulez), but much better than before at 35% though, apparently I've been a good boy with my credit history building recently , and I got also much higher credit limit in cc.

Let's be serious for a moment, in Harrow is impossible, around 50 miles away from London center I need at least 350k house, also that is quite expensive man... Looking few stats almost no one can make it... The people that make it will be in debt soon, I won't be in debt neither, oh wait, for now, later with a less paid job? Mmm...

Then ok, I'm not British and my idea of house doesn't match, if you guys around London are happy of 200k house/apartment, go 5 seconds on Zoopla and see what you get, I would never buy something like this, pay for life, renovate inside every 5-10 years if I'm lucky (due to IKEA cheap !!!!!! stuff) and major maintenances and renovations every 15 for sure.

Up north is a bit better, but not that much, probably Manchester, Edinburgh and some other city that I probably like and offer me something in IT.

I would like do not focus this thread on houses, it's time wasted guys, despite your tentative to help, thanks.

You can have a small (1 bed) detached house in Maidenhead for £350k. Good trains available to Paddington, and its a nice place to live.

https://www.rightmove.co.uk/property-for-sale/property-94484033.html

Otherwise semis & end terraces with more bedrooms can be found for similar prices in Maidenhead and other locations - but as we don't know your budget it is difficult to advise. 

Ikea stuff can also be pretty durable, my mothers kitchen has been in, without issue for 25years. 

Also, if you don't like the UK then you can leave and live elsewhere, the Netherlands is lovely for example...

in that scenario perhaps investment in stocks and renting whilst watching property prices rise, is the strategy for you.

Albermarle

If you go just outside the M25 - means 25 miles from Central London - 30 to 50 mins on train - you can buy modern , attractive two bedroom apartments , near a station , for about half of £600K . However as the OP does not like UK anyway then.....

kinger101

If you entered retirement without you own property, you'd need a pension pot equivalent to 25-30X your annual rent just to cover accommodation costs.  The sensible and boring formula is as follows;

(a) ensure you maximize employer contributions to your pension by putting in what you need to get full match.  
(b) save enough deposit in an interest bearing bank account to buy somewhere affordable (use LISA if you can).  Unless you're not planning to buy for a decade, investments carry too much risk.
(c) make sure you have 6-12 months expenses in cash for rainy days.
(d) focus on saving more for retirement in the most tax efficient manner possible.

You first (and every) home won't be everything you want it to be.  There will always be a bigger house, in a nicer area, with a nicer garden, and 101 other things, that you can't afford.  Life is about compromises, so cut your cloth accordingly and look for something that fits your budget.  We're all living somewhere that will do.  Even someone in a £50M mansion might have wanted a longer pool and second helipad.

Rocksolid

That 1 bedroom detached is the 1st of 5k houses I saw in UK, happy to see that they are so rare, so basically in Maidenhead for 335k... ... ...

I only see detached from 2 beds at least.

I know the point to have an house, but I don't care of my life after 60, even after 50 if I have to be honest, the life is now.

Moreover, I work here and there, my projects are few years only, I mean, it's IT environment.

I would be always not constant with the pension contribution and every new company will make me to start from the basic, that is 4% from their side... (as I understand)

Anyway the point of this conversation was the investments, not house, even if I mentioned the house as investment, but it's not something I can do, I won't buy at these prices, have an high mortgage and have anyway a crap small house 50 miles away from London, sorry guys.

Not sure if you also considered this, not everyone will allow me to work from home, they should for me but it's not a warranty in a new company...

Probably in other countries is called in another way, anyway I've meant a small amount each month (~100 pounds) through ETF, so called life insurance investment in other countries.

I have another life insurance regarding illness, death and other things + a private health insurance.

benbay001

What country are you comparing the houses to?
If you move to any major western European capital city, you will pay alot for a square meter of property.

Your comment in the opening message about the quality of the builds being lower is simply not true. The lack of concrete and use of floor boards used in construction may come as a shock if you're use to concrete floors and rendered walls used in some countries but building standards are very strict in the UK and houses generally last 100s of years compared to 10s of years in other countries. (i remember visiting my Spanish GF's gran and her expressing shock that the house opposite hers was 50 years old as if that was an impressive age).

Comparing buying a property for personal use and investing in stocks is not comparable. You have to find somewhere to live regardless of which you choose, so dodging a £1k mortgage payment doesnt save you £1k because youre now paying rent and therefore paying someone else's mortgage.

Working in London with the high salaries that go with it can set you up well for life, if you reduce your monthly outgoings and save hard. But if you decide you want the same lifestyle and same quality of housing as someone in another part of the UK, then youre going to be running a very tight budget.
I thought that everyone that moved to London on a less than 0.01 percentile salary accepts that they will have a really long commute going from the suburbs to their place of work?

Personally, i live in Southampton and bought a very cheap flat. Its not the greatest place to live but it costs me next to nothing (total running costs including mortgage are less than £750 a month) yet it allows me to have more spare cash at the end of each month than would be normal for someone on many multiples of my salary. Maybe in a few years when i get bored of living in a small flat, i can cash out my investments and move to somewhere much bigger.

On top of that, buying a house with leverage is basically standard practice so any small % of house price growth will massively increase your equity. (and the opposite is true)