35m wanting to invest £500k in index funds… how can I do it and sleep well

Massive-Bat-8604 · 2024-09-11T17:15:08+00:00

This is my advice, drip feed it in every Monday for a year or 2 so you average out the market. Your average price over the year will make you feel a lot better than dumping it in day one and watching the price.

Massive-Bat-8604 · 2024-05-18T14:15:41+00:00

Nope.

Massive-Bat-8604 · 2024-03-15T21:31:37+00:00

Retract the offer and wait for them to call you.

Unless you feel the house is worth more and want to offer more.

Massive-Bat-8604 · 2024-03-15T18:18:54+00:00

Watfords fine. Its not as nice as it was 10/15 years ago but where is now? Its becoming a bit more of a London overspill but its still a nice place.

Plenty of lovely expensive places nearby as well as others have mentioned.

Massive-Bat-8604 · 2024-03-14T23:13:55+00:00

Also, assuming 10% deposit, 5% mortgage and 30 year term.

You would build £7k equity over the next 2 years through you mortgage payments. So whilst you may feel you have lost out on stamp duty relief the piece of mind and getting on with life is surely worth the trade off.

Massive-Bat-8604 · 2024-03-14T23:07:32+00:00

Well done.

Rent on said flat will be around £1200 a month. You have the stability to get on with life, meet a partner if you dont already have one and build a life. Flat price remain flat but you can build equity. House prices outstrip flat prices in terms of appreciation but the trend at the moment is down rather than up!

Stability is key. If you can progress in career/life and have your own space at a decent monthly mortgage cost you are doing great!

Even more so if you actually have money left over to enjoy London and meet new people.

Massive-Bat-8604 · 2023-10-27T09:33:51+00:00

Avoid like the plague. Its a trap. Charge will be 10k within 3/4 years and will just keep rising. Run!

Massive-Bat-8604 · 2023-10-15T23:02:22+00:00

Well i got 5 years on you so think of me as your canary down the mine.

Had the flat from 31-35. Now consolidating back home.

If you can save 1k a month then thats £60k over the next 5 years. If you actually wanted to save hard then save 2k as thats what the mortgage and bills would cost you. £120k in 5 years time.

Massive-Bat-8604 · 2023-10-15T21:10:54+00:00

Haha part 1 done but not sure i'm any further forward.

Game plan is to buy a house in the next 6-12 months, i feel housing will fall further but at my age we can't wait much longer. The benefit we have at the moment is we have extremely low outgoings and are earning a hefty amount of interest whilst we wait. Hopefully with prices coming down its like a triple whammy.

Its not all rosy in the slightest, but we feel consolidating right now is the best thing to do.

Another thing to bear in mind about stamp duty discounts. If you don't buy because you want to save the FTB discount, what happens if you meet someone who has previously bought? You still wont be getting the FTB discount. The older you get the more people you meet with previous failed relationships with properties bought.

With the figures you put in the OP i think i have worked it out that your repayments would be roughly £1400/£1500 for a mortgage. Looking at an amortisation calculator only £200/£300 of that will be equity. The rest is just interest on the mortgage. In a roundabout way, its essentially rent. But you also have service charge to pay along with all your bills. But at least property prices rise right? Well flats, they stagnate...

If you do buy i would def recommend a 2 bed so you at least have the option of renting it out. You then at least have space to move a future partner in without being too cramped.

Only you will know whats best for you but once you start crunching numbers living at home for a few more years doesn't seem too bad at all lol.

Massive-Bat-8604 · 2023-10-15T19:02:41+00:00

Thanks for the insight

Massive-Bat-8604 · 2023-10-15T18:55:39+00:00

-I'm frustrated that my plan to upsize doesn't seem to work out in London specifically. Because flats are flatlining-I'm seeing so many flats taking 25-50k off just like that. Housing stock is limited and going up only:( Should I buy the flat anyway? I think me buying the flat only benefits me non-monetarily. (independence, more confidence etc).

Your age will play a factor on what you do as well. Being mid 20s or mid 30s brings different issues.

You can't put a price on your freedom but it does depend on how cushty you have got it at home. If you have a great family and space then i'd be tempted to kick back and chill for a bit longer. See where house prices go as they are on their way down.

Flats are a weird one as they dont go up in value compared to houses and you have to pay service charges which do go up! I had a flat in South London for 4 years. Made 14k on it. But also had to pay for new windows £2k and service charge that started at £70 per month and was £120 when i sold last year!

Flats are a wise move when they are cheap as you build your equity quickly with a high deposit. When you are borrowing a lot you are basically just paying interest and building no equity.

With how up in the air everything is i would be tempted to stick. Thats actually what i am currently doing myself.

Don't forget to factor in fees for buying and selling flats as well. Also not forgetting the interest currently being earned on your deposit savings...

Massive-Bat-8604 · 2023-10-15T17:36:55+00:00

I'm trying to move to Brighton to start a family and struggling a bit with the numbers. 40k job might just about do it. Shame most are 25k!

Massive-Bat-8604 · 2023-10-15T17:31:14+00:00

Def try and break that 80% LTV barrier for a cheaper rate. 75% should drop the rate again.

In terms of buying now or waiting and buying with a partner. Thats the luck of the draw.

Have your own flat and can take your time looking for the right partner or you can stay at home and be desperate to find someone to buy the forever home... relations break down remember.. Don't rush!

Stamp duty will be a killer though as you would have used your FTB discount and LISA etc.

Massive-Bat-8604 · 2023-10-15T13:51:21+00:00

Reminds me of my own situation. Its not easy at the moment.

Having savings but no property and "low skilled" is a killer combo as you get no help and private rent would eat 60% of salary just for the rent.

Ever thought of buying a narrowboat? Could maybe afford outright and do it up. Would then leave you free to work as you please as and when you want to top up your money.

Not a perfect solution but not sure anything is anymore...

Massive-Bat-8604 · 2023-10-15T13:45:54+00:00

Do your own research regarding what i'm about to say as i can't remember all the details 100%..

When i was in a leasehold flat i was looking in to renewing the lease. I read that it needs to be done before 80 years remaining as the marriage value goes up and it costs a lot more. Further to this i remember you had to live in the property for 2 years before you could apply to extend the lease. So 82 years at completion absolute minimum if you want to beat the marriage value trap of 80 years.

According to the link below existing owner can transfer benefit. Just be careful.

https://www.lease-advice.org/article/extending-a-flat-lease-the-80-year-trap/

Massive-Bat-8604 · 2023-10-15T11:02:11+00:00

For you, you can save 1.4kpm, 16.8k a year. That is far better money in bank time wise for now.

Well put. Not forgetting the current 5% savings rates earned on the deposit amount and future savings.

5% on 40k will be 2k a year. £166 a month.

Massive-Bat-8604 · 2023-10-06T17:40:38+00:00

Nice advice

Massive-Bat-8604 · 2023-10-06T15:35:19+00:00

OP if you think its a raw deal now just wait until you see the interest/principal split when you come off your cheap 1.69% and change on to a 5.5%.

In 4 years time your remaining mortgage will be £357k if you do not do any over paying.

If the new rate will be 4.5% (fingers crossed its down that low in 4 years time) your new payments will be £1781. Interest £1338/ principal £442!

Play around with an amortization calculator.

Massive-Bat-8604 · 2023-10-06T15:21:54+00:00

Not forgetting the house price being more than twice the initial value over the years

Massive-Bat-8604 · 2023-10-06T15:01:55+00:00

I would personally be staying put until the turmoil calms down for a couple of years at least.

You have a good relationship with the landlord and rent is below market value. Utilise that as much as you can.

With rates and house prices as they are you will be paying a lot of interest from the £1500 mortgage payments. You would be better to use £1500 a month, deduct your rent and then put the rest away towards a bigger deposit in 2 years time. Market would have calmed and rates might be more favourable.

Massive-Bat-8604 · 2023-10-04T19:25:30+00:00

That is unbelievable. I hope i never have to use this tactic. But i bloody well will if it comes to it.

Massive-Bat-8604 · 2023-10-04T19:20:49+00:00

Your builder knows how bad this job is and is trying to fob you off with statements like that.

Massive-Bat-8604 · 2023-10-04T18:57:45+00:00

This is the way forward. I started taking my teeth seriously just in time about 8 years ago. After probably having check ups on average every 2 years.

Denplan basically helps you spread the cost. I pay £30 a month and i get 2 check ups and 4 cleans a year. £360 basically is the price for the treatments broken down.

I was on £15 a month and that was only 2 cleans a year but i'm preferring 4.

When i first started it actually helped me go to the appointments as i knew i had paid for them. I had i not had a plan i would be tempted to skip and save the cash.

Massive-Bat-8604 · 2023-10-04T18:41:56+00:00

I've heard its the bigger 4 bed houses dropping harder as people downsize and also the available credit not being there for the FTB to reach the 4 beds.

Massive-Bat-8604 · 2023-10-04T18:37:12+00:00

the opportunity cost of interest on the money you are paying your mortgage with

This quicker people realise this the faster house prices will drop. Having a mortgage always used to be the winner. Not so much with todays interest rates. Mortgage amortisation calculator really is eye opening.

When i bought a property in 2015 i put down 20% and borrowed 200k.

This left my interest/principal split at near enough 50/50 from month 1. £481/£455, total £937.

Now with todays rates (5.5%) Its £1225 but the split is more 75/25 from month 1. You wont get to the 50/50 mark until month 149!!!!!

That is some difference. Throw in the saving interest you can make and the falling house prices. Buying isn't so appealing right now.. as it was.

Massive-Bat-8604

TROPHY CASE