Probate house sale - and then what?

[UmBongo]

The sale of my late parents' house is drawing towards completion. Exchange of contracts has been done. Fingers crossed, all will be done in the next few weeks.

I am a little at odds as to what to do next. I am currently in a rented council flat that I'd actually like to move away from, ideally in the summer or autumn.

Logical step is to use the inheritance to put down as a deposit on a very modest house or flat. I have been touch with an IFA for mortgage advice. A modest house will be around the £140-150k mark, flats £100-130k mark in my preferred area.

Or should I just wait out the housing market and instead top up my ISA, savings and open up an index tracker fund with Vanguard?  Hoping for a massive HPC doing the latter. 

[spongeh]

I doubt there wil ever be a 'massive HPC' in real terms, I'm expecting 5-10% off maximum over the next few years as the government comes up with more and more scemes to prop the housing marked up.
 

[Green Devil]

1 minute ago, spongeh said:

I doubt there wil ever be a 'massive HPC' in real terms, I'm expecting 5-10% off maximum over the next few years as the government comes up with more and more scemes to prop the housing marked up.
 

With 25% more money floating around the fiat system than last year, its more likely that the prices go up 5-10% not down 5-10%.

 

[Shamone]

We got full asking for ours and had to pay full asking for hopefully our next

[spongeh]

We sold in 2008 and have been renting for 12 years waiting for the big crash... We're litterally waiting for probate to be granted on the house we're buying and then we'll be home owners again.

[spygirl]

57 minutes ago, UmBongo said:

The sale of my late parents' house is drawing towards completion. Exchange of contracts has been done. Fingers crossed, all will be done in the next few weeks.

I am a little at odds as to what to do next. I am currently in a rented council flat that I'd actually like to move away from, ideally in the summer or autumn.

Logical step is to use the inheritance to put down as a deposit on a very modest house or flat. I have been touch with an IFA for mortgage advice. A modest house will be around the £140-150k mark, flats £100-130k mark in my preferred area.

Or should I just wait out the housing market and instead top up my ISA, savings and open up an index tracker fund with Vanguard?  Hoping for a massive HPC doing the latter. 

See it this way.

Assuming you live in same or similar area you are exiting a housing position to take another.

You could wait for cheaper prices but you then need to account for rent.

 

[Gloommonger]

56 minutes ago, spongeh said:

We sold in 2008 and have been renting for 12 years waiting for the big crash... We're litterally waiting for probate to be granted on the house we're buying and then we'll be home owners again.

Same for us. We bought end 2019 with massive mortgage. Can't beat them join them. House gone up 40k already. Nuts. Op, I would buy while you can.

[Green Devil]

9 minutes ago, Gloommonger said:

Same for us. We bought end 2019 with massive mortgage. Can't beat them join them. House gone up 40k already. Nuts. Op, I would buy while you can.

Its a bit like bitcoin, theres always a greater fool who will pay more 

[Bobthebuilder]

1 hour ago, UmBongo said:

The sale of my late parents' house is drawing towards completion. Exchange of contracts has been done. Fingers crossed, all will be done in the next few weeks.

I am a little at odds as to what to do next. I am currently in a rented council flat that I'd actually like to move away from, ideally in the summer or autumn.

Logical step is to use the inheritance to put down as a deposit on a very modest house or flat. I have been touch with an IFA for mortgage advice. A modest house will be around the £140-150k mark, flats £100-130k mark in my preferred area.

Or should I just wait out the housing market and instead top up my ISA, savings and open up an index tracker fund with Vanguard?  Hoping for a massive HPC doing the latter. 

The Best advice I had when I received my inheritance was "do nothing for 6 months". Stick it in ISA / instant access savings and think about it for a while. Dont make any rash decisions.

[spunko]

You mean you aren't buying a brand new Ducati? FFS.

All joking aside, I'd probably just wait it out. While prices may well rise in that time, they won't rise by much to make any difference to your affordability. How secure is your job out of interest?

[wherebee]

On 15/02/2021 at 04:13, Bobthebuilder said:

The Best advice I had when I received my inheritance was "do nothing for 6 months". Stick it in ISA / instant access savings and think about it for a while. Dont make any rash decisions.

Although there is always the risk of a big financial crash and bail ins, with nice lump sums raided by the government (see Cyprus) whilst house 'value' is left alone.

I'd say start looking for houses in the area you like, to give you a really good feel of value and also a feel of which estate agents are trustworthy (clue: about 3%).  

[Bobthebuilder]

3 minutes ago, wherebee said:

Although there is always the risk of a big financial crash and bail ins, with nice lump sums raided by the government (see Cyprus) whilst house 'value' is left alone.

I'd say start looking for houses in the area you like, to give you a really good feel of value and also a feel of which estate agents are trustworthy (clue: about 3%).  

I think you have a years grace with life changes like inheritance.

[wherebee]

53 minutes ago, Bobthebuilder said:

I think you have a years grace with life changes like inheritance.

in a bail in, no rules apply.  Look at MF Global.  If you had inherited a million bucks the week before it went down, you might have ended up with a lot less..

https://www.nytimes.com/2011/11/05/your-money/mf-global-customers-seeking-access-to-accounts.html

although to give the complete picture, it looks like in 2020 almost all customers got 100 cents on the dollar back.  Still, nine years with no income from your frozen money - not bad, eh? 

[Bobthebuilder]

12 minutes ago, wherebee said:

in a bail in, no rules apply.  Look at MF Global.  If you had inherited a million bucks the week before it went down, you might have ended up with a lot less..

https://www.nytimes.com/2011/11/05/your-money/mf-global-customers-seeking-access-to-accounts.html

although to give the complete picture, it looks like in 2020 almost all customers got 100 cents on the dollar back.  Still, nine years with no income from your frozen money - not bad, eh? 

Your avatar is the best one on this forum. It's me and you...

[Frank Hovis]

7 hours ago, wherebee said:

Although there is always the risk of a big financial crash and bail ins, with nice lump sums raided by the government (see Cyprus) whilst house 'value' is left alone.

I'd say start looking for houses in the area you like, to give you a really good feel of value and also a feel of which estate agents are trustworthy (clue: about 3%).  

 

Sounds like good advice.

There are two huge financial advantages to having (one) house: not having to find rent out of net income and the way the government excludes it from means testing for any benefits.

As to waiting well you might find your ideal home now and not mind that you're paying £20k more than you might if you wait a year when the effects of lockdown have fully fed through to reduce prices: evictions restart, BTLers dump portfolios to clear debts etc.

Then there are the adverse mental effects from feeling that you are putting your life on hold awaiting the "perfect" time to buy.

[wherebee]

4 hours ago, Frank Hovis said:

 

Sounds like good advice.

There are two huge financial advantages to having (one) house: not having to find rent out of net income and the way the government excludes it from means testing for any benefits.

As to waiting well you might find your ideal home now and not mind that you're paying £20k more than you might if you wait a year when the effects of lockdown have fully fed through to reduce prices: evictions restart, BTLers dump portfolios to clear debts etc.

Then there are the adverse mental effects from feeling that you are putting your life on hold awaiting the "perfect" time to buy.

Of course it's good feckin advice, Frank, it's from me.

[spongeh]

On 14/02/2021 at 15:58, spongeh said:

We sold in 2008 and have been renting for 12 years waiting for the big crash... We're litterally waiting for probate to be granted on the house we're buying and then we'll be home owners again.

Probate on our purchase was granted this morning, so it looks like we're moving.

Thinking back to the OP, I wouldn't advise someone to go either way, as it's a decsion they'll have to live with. I'm happy to live with 20-30% off house prices as I'm buying a home not an investment.

My personal circumstances mean I'm buying a 3 bed semi, 2 x single wage, 85% LTV with the intention of paying it off over the next 15 years. We're down sizing from our 5 Bed detached rental into the smaller house as I feel the heating costs over the next few years are going to get silly, this whole green heating agenda is bobbins. The wife is fully bought into this reason for down sizing and has not pushed for us to try and buy the biggest house in the area.

The house next door to our rental was put on for 30% more than they payed in 2017 and has apparantly sold for asking within 2 days, another house in the village (a friends) has sold within days to a cash buyer relocating from London and they're pushing to complete in the next 4 weeks. Good houses in good areas will always sell.

[Andersen]

@UmBongo I think the current rules are your savings are protected up to £85k. If you have more than that I'd look at splitting it between banks so you have less that £85k in each. Check the banks you chose are unrelated ( ie Lloyds & TSB split a few years ago, unless it's changed the "Lloyds TSB" protection covers you to £85K total not to £85 in each !). Other banks have similar limits - DYOR.

There is a temporary raised limit for some funds, I think cash above £85k is protected for 12 months if it is from the sale of your home, again DYOR.

Interest on savings is realistically nil. I've heard premium bonds offer slighlty better return with zero risk as they gaurentee to return your investment - again DYOR.

* DYOR = do your own research  

Condolences, and if you find a sure-fire investment rather than having savings going to waste in a zero-interest accounts pls share the good news.

Edited February 16 by Andersen
typo

[Green Devil]

13 hours ago, spongeh said:

Probate on our purchase was granted this morning, so it looks like we're moving.

Thinking back to the OP, I wouldn't advise someone to go either way, as it's a decsion they'll have to live with. I'm happy to live with 20-30% off house prices as I'm buying a home not an investment.

My personal circumstances mean I'm buying a 3 bed semi, 2 x single wage, 85% LTV with the intention of paying it off over the next 15 years. We're down sizing from our 5 Bed detached rental into the smaller house as I feel the heating costs over the next few years are going to get silly, this whole green heating agenda is bobbins. The wife is fully bought into this reason for down sizing and has not pushed for us to try and buy the biggest house in the area.

The house next door to our rental was put on for 30% more than they payed in 2017 and has apparantly sold for asking within 2 days, another house in the village (a friends) has sold within days to a cash buyer relocating from London and they're pushing to complete in the next 4 weeks. Good houses in good areas will always sell.

Sorry to hear you are having to downsize from a 5 bed detached to a 3 bed semi. Thats quite a downsize. Its gonna be tough, hope it turns out ok. 

[UmBongo]

On 15/02/2021 at 19:04, spunko said:

You mean you aren't buying a brand new Ducati? FFS.

All joking aside, I'd probably just wait it out. While prices may well rise in that time, they won't rise by much to make any difference to your affordability. How secure is your job out of interest?

I'm not very good on two wheels!  

I'd like to move because it's a bit shit living where I do now. Some Chad put a fecking caravan in one of the parking spots behind my flat. Fancy something with a garden. Job should be safe for the next 2-3 years but I'm on the lookout to move onto something else. 

I did speak to a mortgage advisor a fortnight ago who I hope will be touch shortly. 

[sleepwello'nights]

24 minutes ago, UmBongo said:

 

I did speak to a mortgage advisor a fortnight ago who I hope will be touch shortly. 

That's not a good indicator. I'd contact a few more to get a better response. If an advisor is lax in getting back to a potential client how speedy will he be in arranging a mortgage for you.

There is so much information available on the internet about mortgages you could do your own research and approach lenders direct. Why pay unless you are really pushed for time?

[UmBongo]

2 hours ago, sleepwello'nights said:

That's not a good indicator. I'd contact a few more to get a better response. 

TBF I did say to him that there was no rush. Maybe he's inundated with other mortgage applicants.  Seller's market?! 

I think I have a reasonable understanding of mortgages so I may still be able to find one on my own. 

[UmBongo]

The house sale prolongeth! Still waiting to exchange and complete on the house. Our buyer's selling issues are delaying things cos the property he's selling is leasehold. Not cladding related.

There is bugger all on the market at the moment that piques my interest. The few that do are well out of my price range. Such is life.

[goldbug9999]

On 14/02/2021 at 15:25, UmBongo said:

I am currently in a rented council flat

Well thats cheap rent, guaranteed tenure, minimal interference from landlord etc, I'd think long and hard before giving that up. Also, I presume you have right to buy ? so you could buy it at a massive discount and sell it on.

[UmBongo]

56 minutes ago, goldbug9999 said:

Also, I presume you have right to buy ? so you could buy it at a massive discount and sell it on.

I could theoretically buy the flat for cash. However, I don't like the flat enough to do that. The soundproofing is poor, the road going through the estate is a tricky to navigate due to the parked cars everywhere.