skipping a mortgage and buying outright

chilswelluk

I am 40 years of age with around 30k savings.  I want to save another 80k, giving me a total of 110k.  The plan is to buy a derelict property for cash and renovate it myself over the next 10 years or so (I will live in a caravan on site while I do the work myself).  I am unable to get a mortgage on such a property, so the plan is to become a cash buyer and skip the mortgage all together.  I currently earn 38k per year (also have prospect of overtime) and have just moved into a cheap house share for £70 per week.  My aim is to save at least 25k per year.  I think it's doable, but I just hope I can stay sane long enough living in the house share with much younger people  - I have already had a few arguments over noise, which is not a good start!

I am aiming to be very frugal, where my only expense is a 20 year old car.  I am looking to budget around £30 per week for food and don't envisage going out or buying clothes etc very often.  My end goal seems all a long way off at the moment, but I am sure the next few years will fly by, and once I have built up a nice savings pot, there will be light at the end of the tunnel.

longway2go

Good luck 😊

Squirrelz92

Wow that sounds like quite an exciting venture, buying a derelict property and renovating on the go. Have you started looking at what sort of run down house you'd prefer? Is auction a possibility for those sorts of houses? I wish you all the very best in your savings quest!

Tahlullah.H

This is so exciting. I will be cheering you along.

chilswelluk

Squirrelz92 said:

Have you started looking at what sort of run down house you'd prefer? Is auction a possibility for those sorts of houses? I wish you all the very best in your savings quest!

I did actually find a house for 100k with a tree growing from it!  So when I say derelict that's what I mean!  A bit more than "run down" in my opinion!  The key is, I want somewhere with a little land and something I can make a project for the next 10 years or so.  I'm certainly not in  a rush to complete the work once I have funded the purchase.  I will throw money at it as and when I can, and live on site in a caravan.  I have friends that have done exactly the same thing and now live in a house that they would never have been able to afford on their salary. 

The biggest challenge will be staying sane in my cheap house share, but I think it will get easier as time goes on.

South_coast

Another poster has done this in the past, so it's definitely possible:
https://forums.moneysavingexpert.com/discussion/604887/buying-a-house-without-a-mortgage/p1

Good luck in your quest 😀!

Mickey666

chilswelluk said:

I am 40 years of age with around 30k savings.  I want to save another 80k, giving me a total of 110k.  The plan is to buy a derelict property for cash and renovate it myself over the next 10 years or so (I will live in a caravan on site while I do the work myself).  I am unable to get a mortgage on such a property, so the plan is to become a cash buyer and skip the mortgage all together.  I currently earn 38k per year (also have prospect of overtime) and have just moved into a cheap house share for £70 per week.  My aim is to save at least 25k per year.  I think it's doable, but I just hope I can stay sane long enough living in the house share with much younger people  - I have already had a few arguments over noise, which is not a good start!

I am aiming to be very frugal, where my only expense is a 20 year old car.  I am looking to budget around £30 per week for food and don't envisage going out or buying clothes etc very often.  My end goal seems all a long way off at the moment, but I am sure the next few years will fly by, and once I have built up a nice savings pot, there will be light at the end of the tunnel.

With £30k savings and a £38k income is buying a 'normal' house really not a possibility?  With your frugal living, you would very likely be able to pay off any mortgage well under the standard 25 years.  Or, have you looked at a 'self-build' project, whereby you purchase a fully serviced, fully permissioned plot of land on which to build your own house, using as little or as much help as you need.  Specialist mortgages are available for such projects.

I ask all that as someone who bought a VERY run-down property and renovated it by myself (mainly), including completely stripping and re-roofing four roofs, completely renewing all the surface water drainage (so lots of groundworks) and well as re-plastering pretty much every room - not to mention all the usual electrical and plumbing works, new heating systems, new kitchen, new bathrooms etc.

However, my point is that I did that over 10 years or so and I'm still rushing to finish the last room before Christmas (but will probably miss the deadline!).  More to the point, I also retired when I started so was able to spend all my time on the renovation.  I doubt I'd have been able to do the renovation in my spare time while holding down a full-time job.  I doubt it because even though I had no other job, I found that working full-time on the house was hard work!  Hard enough that I didn;t want to spend all my waking hours on the house and felt I needed to pace myself, thereby prolonging the project beyond my original estimates.  Still, perhaps not as hard as living in a £70pw house share with only £30pw to spend on food though.  I would also encourage you to very carefully plan the financial aspects of any such renovation works - and then add 20% for contingency.  Also, don't forget the cost of tools and machinery - it will be folly to skimp on them and good ones will be expensive.  I'm not talking just hand tools, cordless drills, concrete mixers, scaffold towers etc, but proper 'workshop' tools such as table saws, bandsaws, routers, planers, sanders - even a welder in my case.  I've probably spent over £10k on tools alone, though it means there is now almost no job I can't tackle around the home myself.  I even bought a mini-digger for all the groundworks and landscaping at one stage, then sold it after four years for £500 less than I paid for it.  But the exact mix of tools will depend on the level of dereliction you're dealing with.

Anyway, I'm in no way trying to dissuade you from such a project.  I'm sure it will be as exciting and rewarding as mine has been, but be realistic.  It will be hard work, it will cost more than you think and you will find it almost impossible to bail out halfway through it if you change your mind.  But such projects are possible and they are life-changing, so if that's your ambition then go for it.  Just keep your eyes open, hope for the best but plan for the worst.  Best of luck!

chilswelluk

Mickey666 said:

With £30k savings and a £38k income is buying a 'normal' house really not a possibility?  With your frugal living, you would very likely be able to pay off any mortgage well under the standard 25 years.  Or, have you looked at a 'self-build' project, whereby you purchase a fully serviced, fully permissioned plot of land on which to build your own house, using as little or as much help as you need.  Specialist mortgages are available for such projects.

The problem with self build mortgages is that funding is dependent on you completing within a few years.  Whereas, it is likely to take me 10 years or more to complete the build.  I really don't want the time pressure that comes with such funding.

As for buying a "normal house", that is well outside of my budget for the type of house that I want.  If I were to buy something cheaper, it would not be what I wanted and in any case the interest payments would cost more than the cheap rent I am currently paying.  Plus, the market could tank and I could be stuck in negative equity in a rubbish house that I never wanted to buy.  As it stands, my rent is dirt cheap and I may get lucky if there is a crash in the housing market.  If it takes me 3 years to save enough money to buy outright, I will have spent less than 11k on rent.  When you consider legal fees, mortgage fees, moving fees, interest payments, possibility of the market crashing etc, 11k looks a smart option. 

Mickey666

It sounds like you've given your plans a lot of thought, which is the most important thing, and I'd say you're realistic about the timescale for such a project.  So, if you're happy with a relatively deprived three years to save enough capital, followed by ten years of hard physical work while holding down a full-time job and living in a caravan then go for it.  Dreams are meant to be followed so all power to you!

getmore4less

just checking the numbers
£38k gross, net £19,500 - £25k  = £4,500
rent and food £100pm = £5,200
£700  short.
37- 40hr weeks that's net ~£10ph  70hrs overtime to beak even

should be doable.

£70pw rent is enough to support mortgage interest on around £150-200k anything around that price that would be more comfortable the the house share.

If it would stretch to a 2 bed with a lodger you could be effectively rent free and all your saving goes to paying down the mortgage and you get to choose your lodger.

Sistergold

There is nothing one can not do if you believe! Will be cheering you on! 👯‍♂️