Inherited 50k. What would be my most sensible option?

Eco_Miser

In your circumstances, using the lump sum to buy and furnish a house seems the sensible option.

AlexMac

bflare said:

My own personal feelings at the moment is to use the money to get on the property ladder rather than some kind of income. I have to travel to work quite a distance each day so i need a reliable car. I was considering a loan prior to this inheritance. As I say I have no debts & I am able to save money each month as I have minimal outgoings. I had managed to save 4k prior to this which was going to go towards a mortgage deposit. 

I'm not usually on this forum and know almost nothing about savings (I dropped in today only for some savings advice) but based on my own experience, I'd say that buying a house for my own occupation has been the best thing I've ever done. 

So you can guess what I'd advise!  Especially as you've now hinted twice that this is your preferred option?

Whether you can afford to buy seems wholly dependent on where you choose to live and to work; UK price averages range from £130k in the NE, to nudging £500k in London ( https://www.statista.com/statistics/751646/average-regional-house-price-in-england/ ) and where I live you can't get a family home with a garden for less than £700k. 

I'm 30-odd years older than you, so I've also experienced 40-odd years of staggering house price inflation; my first home, admittedly a wreck, cost £10k in 1975 in a then run-down area of inner London where prices now nudge £1 million.  A little ex-Council flat which I bought in 1995 with a redundancy payoff  to help my girlfriend's (now my wife's) daughter and grand daughter out of their cr4p rental has appreciated by an eye-watering 700%.  Even a place we bought for £70k at auction in 1997, again as a leaky-roofed wreck to live in while we restored it at a cost of £20-30k, is probably now worth £400k. That won't happen in the UK in the next 10 years, but in my wholly uninformed opinion, neither will the price crashes of 1987 and 2008, when house prices in some areas fell 20-25% and took several years to recover.

Even though you should look at a house as somewhere to live, not an investment, it's a really tax-efficient way to acquire an asset that's likely to appreciate; especially if you can cope with a bit of DIY or buy a do-er upper to which you can add value.  Lots of advice on this website's own  House buying & renting forum... 

So I'd start checking with lenders (my favourite mutual, Nationwide, have  treated me brilliantly over the years and have handy online guides for new buyers, and mortgage calculators for affordability checks) and I'd start looking!   

Very best wishes, with apologies to all you savings experts for crashing your Forum; I'm still searching for something risk-averse to do with a £20k matured bond! 

xylophone

You already have pension provision of your own and are still contributing to your current arrangement.

Re S32 https://www.financialadvice.net/s32_buy_out_plan/zone/1288

It seems to me that if your inheritance from your father is sufficient for a deposit on a home of your own for you and your son, then this would be a sensible use for those funds.

bflare

AlexMac said:

bflare said:

My own personal feelings at the moment is to use the money to get on the property ladder rather than some kind of income. I have to travel to work quite a distance each day so i need a reliable car. I was considering a loan prior to this inheritance. As I say I have no debts & I am able to save money each month as I have minimal outgoings. I had managed to save 4k prior to this which was going to go towards a mortgage deposit. 

I'm not usually on this forum and know almost nothing about savings (I dropped in today only for some savings advice) but based on my own experience, I'd say that buying a house for my own occupation has been the best thing I've ever done. 

So you can guess what I'd advise!  Especially as you've now hinted twice that this is your preferred option?

Whether you can afford to buy seems wholly dependent on where you choose to live and to work; UK price averages range from £130k in the NE, to nudging £500k in London ( https://www.statista.com/statistics/751646/average-regional-house-price-in-england/ ) and where I live you can't get a family home with a garden for less than £700k. 

I'm 30-odd years older than you, so I've also experienced 40-odd years of staggering house price inflation; my first home, admittedly a wreck, cost £10k in 1975 in a then run-down area of inner London where prices now nudge £1 million.  A little ex-Council flat which I bought in 1995 with a redundancy payoff  to help my girlfriend's (now my wife's) daughter and grand daughter out of their cr4p rental has appreciated by an eye-watering 700%.  Even a place we bought for £70k at auction in 1997, again as a leaky-roofed wreck to live in while we restored it at a cost of £20-30k, is probably now worth £400k. That won't happen in the UK in the next 10 years, but in my wholly uninformed opinion, neither will the price crashes of 1987 and 2008, when house prices in some areas fell 20-25% and took several years to recover.

Even though you should look at a house as somewhere to live, not an investment, it's a really tax-efficient way to acquire an asset that's likely to appreciate; especially if you can cope with a bit of DIY or buy a do-er upper to which you can add value.  Lots of advice on this website's own  House buying & renting forum... 

So I'd start checking with lenders (my favourite mutual, Nationwide, have  treated me brilliantly over the years and have handy online guides for new buyers, and mortgage calculators for affordability checks) and I'd start looking!   

Very best wishes, with apologies to all you savings experts for crashing your Forum; I'm still searching for something risk-averse to do with a £20k matured bond! 

Thanks for that. I am in Leeds & prices are not that bad actually. I only need a 2 bed & I reckon I can get something in the area I need (due to School) for 120k. I am currently paying £600 a month in rent for a 2 bed bungalow & although it is in a nice area the property hasn't had any modernization for the last 20 years. I have done what I can to freshen it up but after hearing the land lady hint that she may need the property back it has slightly put me off doing too much. 

I wish I could have bought a house years ago but it is what it is & at the time i wasn't in a position to be able to buy so I have been renting ever since. I have been trying to save for a mortgage but it's been difficult being a single parent. This might be my only opportunity to get on to the property ladder & feel a little more secure.  

kidmugsy

My own personal feelings at the moment is to use the money to get on the property ladder rather than some kind of income. I have to travel to work quite a distance each day so i need a reliable car. I was considering a loan prior to this inheritance. As I say I have no debts & I am able to save money each month as I have minimal outgoings. I had managed to save 4k prior to this which was going to go towards a mortgage deposit.  ...  after hearing the land lady hint that she may need the property back it has slightly put me off doing too much. 

 ... This might be my only opportunity to get on to the property ladder & feel a little more secure.  

You've made a compelling case for buying a house and car.  Money is for spending and sometimes that means spending this year not in twenty years time.  Do remember to hold back a useful emergency fund.  Some people suggest six months earnings but I suppose that should depend on how secure a job you've got.

Good luck with your new house and your lad's schooling.