£200k inheritance, property ladder or not?

jem1276

Hi, 
We are incredibly fortunate and are about to inherit £200k.
We are a married couple in our late 40's, 2 kids. No debt, but no savings either.
Currently renting, no assets.

1 side of us says use a large amount for a deposit, get a mortgage and buy a house.
Other side says stay as you are, invest it and make it make a much bigger amount for the future.

What would you do? 
Thank you

jem1276

Hi, 
We are incredibly fortunate and are about to inherit £200k.
We are a married couple in our late 40's, 2 kids. No debt, but no savings either.
Currently renting, no assets.

1 side of us says use a large amount for a deposit, get a mortgage and buy a house.
Other side says stay as you are, invest it and make it make a much bigger amount for the future.

What would you do? 
Thank you

RobfromCornwall

I would buy a house.

Dazed_and_C0nfused

RobfromCornwall said:

I would buy a house.

Agree with this.

masonic

It's a personal decision and really depends on your circumstances. I am currently renting and investing, but I would consider my situation to be quite niche. In different circumstances I'm sure I would have bought a house at the first opportunity.

theoretica

Personally, I would (and did) buy a property, because I value stability of a place to live.

What sort of place could you afford to buy compared to where you now live, how would mortgage payments (and something to save for maintenance) compare to what you currently pay in rent? 

Devongardener

Definitely buy a property, you really don’t want the high cost and insecurity of renting once you reach retirement age and have only pension income.
We didn’t buy until our mid forties, and worked hard to pay off the mortgage before we retired, and feel so thankful that we have the security of a paid off house, not at the whim of a landlord.

Yorkie1

Only you will be able to assess your priorities, but you might want to consider whether you will want to be renting into retirement. You may have a stable rental at the moment, but with the tax and regulatory landscape becoming ever more challenging for landlords, you may find that that changes in the future.

It wouldn't hurt to speak to a broker to see what sort of mortgage offer you could go up to, while not having a mortgage too far into retirement, to help inform your options.

It is also generally advised to have at least 3-6 months' expenditure as rainy day funds, and you may also wish to consider how much it might take to support children through university or other further education, if that is likely to be relevant.

thegreenone

I think it all depends on the cost of the sort of house you are looking for in your chosen area.

Remember, investments can go up and ..... down.  And down.  You could lose a lot. Or you could gain a lot.  It's a total gamble.  One gamble I wouldn't want to take with the size of your inheritance and the impact it could have on your future.

My thoughts would always be to buy a property.   

Jemma01

I'd buy a property no question, because I too value security (in fact I did just that with 300k) However I'd consider speaking to an independent financial advisor to see in the short term 10 years how much it could generate in a medium and low risk investments and compare it to how much rent you'd be paying in the next 10 years + the likelihood of properties going up.

Where I live now, houses went sky rocketing as covid hit and Londoners were moving out to bigger homes, and the nonsense of HS2.

jimjames

jem1276 said:

Currently renting, no assets.

Unless you plan on moving to a different area I think you've answered your question especially with 2 kids. The lack of security with renting would mean for me buying somewhere would be a priority.

You've not mentioned areas or values but what you could do is pay less deposit and invest the remaining money if that's what you want to do. Depends how the mortgage would compare to rent as well.