Would you do anything differently? (If you were me)
Discussion
Hello.
Just looking for some advice in regards to my finances and my plan to buy my first home.
For context, mid-late 20s, living with parents (in the south east).
Currently earning ~ £50k per year, putting away approximately £1500 a month of my paycheque. (In case it is relevant, public sector job with the pension to go with it - So that base is covered, unless I am mistaken).
Circa £130k saved for a deposit; this is what I'm asking for advice about.
I'm planning to buy a house in mid 2026 (12-18 months from now). Will be looking at houses in the 400-450k region in the South East.
Currently my savings are split approximately 28% in stocks/shares (All in ISAs), 22% in Premium Bonds, and 50% in various cash savings accounts/ISAs. I have maxed out my 20k ISA limit for this year. Have been maxing out my LISA limit for the past several years.
The stocks/shares are investments I made quite some time in ago and have not touched or added to for the past few years.
With the research i've been doing, I know it would have been a wiser move to have drip fed into the stocks/shares ISA/holdings over the past few years, with the idea that there was a longer time period of investment, and therefore more time in the market/more chance of it working in my favour, however that time has gone, and my mistake for not doing so, and missing out on the upside of having done this. Particularly seeing how well the stock market has been performing post covid, which is initially what scared me off a little after having started investing a few years prior.
With the constant advice given being to become more risk averse the closer you get to needing access to the money, my question is, would you leave things as they are? Or succumb to the temptation to change the weighting from the current approximate 25-30% equities, 70-75% cash that I currently have it in, to a slightly higher equity weighting for the next 12-18 months when it is all withdrawn for the house purchase?
Any advice would be much appreciated. With most people in my circle not being particularly financially clued up, essentially I am thinking out loud and seeing if anyone on here would like to give their two pence.
Just looking for some advice in regards to my finances and my plan to buy my first home.
For context, mid-late 20s, living with parents (in the south east).
Currently earning ~ £50k per year, putting away approximately £1500 a month of my paycheque. (In case it is relevant, public sector job with the pension to go with it - So that base is covered, unless I am mistaken).
Circa £130k saved for a deposit; this is what I'm asking for advice about.
I'm planning to buy a house in mid 2026 (12-18 months from now). Will be looking at houses in the 400-450k region in the South East.
Currently my savings are split approximately 28% in stocks/shares (All in ISAs), 22% in Premium Bonds, and 50% in various cash savings accounts/ISAs. I have maxed out my 20k ISA limit for this year. Have been maxing out my LISA limit for the past several years.
The stocks/shares are investments I made quite some time in ago and have not touched or added to for the past few years.
With the research i've been doing, I know it would have been a wiser move to have drip fed into the stocks/shares ISA/holdings over the past few years, with the idea that there was a longer time period of investment, and therefore more time in the market/more chance of it working in my favour, however that time has gone, and my mistake for not doing so, and missing out on the upside of having done this. Particularly seeing how well the stock market has been performing post covid, which is initially what scared me off a little after having started investing a few years prior.
With the constant advice given being to become more risk averse the closer you get to needing access to the money, my question is, would you leave things as they are? Or succumb to the temptation to change the weighting from the current approximate 25-30% equities, 70-75% cash that I currently have it in, to a slightly higher equity weighting for the next 12-18 months when it is all withdrawn for the house purchase?
Any advice would be much appreciated. With most people in my circle not being particularly financially clued up, essentially I am thinking out loud and seeing if anyone on here would like to give their two pence.
Edited by Shiklio on Thursday 27th February 02:04
A 6x mortgage? I’m well out of touch multiples but that would have scared the s
t out of a 20-something me.
Don’t forget that an expensive house won’t be cheap to run…
My advice to young people is always the same: think about how you can invest in improving your earning potential. If you can spend a bit of money on training/development that fast tracks your career then that pays back time and time again,especially if your peers are expecting to be spoon-fed development by their employers.
t out of a 20-something me. Don’t forget that an expensive house won’t be cheap to run…
My advice to young people is always the same: think about how you can invest in improving your earning potential. If you can spend a bit of money on training/development that fast tracks your career then that pays back time and time again,especially if your peers are expecting to be spoon-fed development by their employers.
@ Shiklio....
my 2 cents:
1/ capital preservation
2/ 'moment in time'
3/ risk vs reward - how the numbers may make a diff to 'real life'
gotta preserve capital as much as possible, ie/ you won't want to see a 20k loss ( 'proper loss vs paper loss where time can cure the problem);
moment in time:
only you know yr circs for buying in 2026. If there is no finite time horizon, just a 'desire' to buy, then its easier to be pragmatic about investing and de-risking.
Can tell you that we moved last yr, Mrs was 100% keen to get out of teh rental we'd been in ( 'want my own home again') - my view was 'does it matter if we stay here another 2-4-6-8mths' - my argument was that i was 75-80% sure based on probabilities that our investments would rocket, and that at the time we needed to sell some of those investments it was not the best time.
IF things had played out as they have, and IF we'd stayed in rented for literally another 2 mths, the financial upside to us would have been huge. So there's the case for, 'timeframe'.
So, i'd say evaluate whether there's a fixed time that you HAVE to get on the ladder, as that's the starting point to make decisions from; You might want to, and aspire to, but if you needed to wait til beginning 2027 or mid 2027 how would that impact your life ( rhetorical Q).
risk/reward;
only u can run the numbers; but if you manage to achieve £10/20/30k more by investing now, but you also risk having to wait beyond your preferred timeframe ( if market corrects at the wrong time) - how does that sit with you; What;'s the number that changes things massively for you.
There will be such a number, and maybe depending on yoru own answer to point 2 - you may decide to just hold off and see how much you can accumulate.
I'd say unless you are in high grow stocks, you're probs not going to see much £change to your position over a 12mth period, maybe not enough to warrant changing things.
Easy to look back and say - oh if i'd had 50k in nvda a year ago, or mstr a year ago.....concentrated plays can pay off big time, but issue is TIME. If you have an open ended timeframe and are investing for the longer term, easier to stomach the odd 5%-10% correction; Less so if you are 'on the clock'.
my 2 cents:
1/ capital preservation
2/ 'moment in time'
3/ risk vs reward - how the numbers may make a diff to 'real life'
gotta preserve capital as much as possible, ie/ you won't want to see a 20k loss ( 'proper loss vs paper loss where time can cure the problem);
moment in time:
only you know yr circs for buying in 2026. If there is no finite time horizon, just a 'desire' to buy, then its easier to be pragmatic about investing and de-risking.
Can tell you that we moved last yr, Mrs was 100% keen to get out of teh rental we'd been in ( 'want my own home again') - my view was 'does it matter if we stay here another 2-4-6-8mths' - my argument was that i was 75-80% sure based on probabilities that our investments would rocket, and that at the time we needed to sell some of those investments it was not the best time.
IF things had played out as they have, and IF we'd stayed in rented for literally another 2 mths, the financial upside to us would have been huge. So there's the case for, 'timeframe'.
So, i'd say evaluate whether there's a fixed time that you HAVE to get on the ladder, as that's the starting point to make decisions from; You might want to, and aspire to, but if you needed to wait til beginning 2027 or mid 2027 how would that impact your life ( rhetorical Q).
risk/reward;
only u can run the numbers; but if you manage to achieve £10/20/30k more by investing now, but you also risk having to wait beyond your preferred timeframe ( if market corrects at the wrong time) - how does that sit with you; What;'s the number that changes things massively for you.
There will be such a number, and maybe depending on yoru own answer to point 2 - you may decide to just hold off and see how much you can accumulate.
I'd say unless you are in high grow stocks, you're probs not going to see much £change to your position over a 12mth period, maybe not enough to warrant changing things.
Easy to look back and say - oh if i'd had 50k in nvda a year ago, or mstr a year ago.....concentrated plays can pay off big time, but issue is TIME. If you have an open ended timeframe and are investing for the longer term, easier to stomach the odd 5%-10% correction; Less so if you are 'on the clock'.
LooneyTunes said:
A 6x mortgage? I’m well out of touch multiples but that would have scared the st out of a 20-something me.
Would scare the st out of a 20-something me. t out of me now I'm older and earning more too. My approach when buying has been to set myself a target repayment amount that I'm comfortable being able to pay back, and then work out what loan size that works out to be, taking in to account possible increases in the mortgage rate, which of course relates to how long you're fixed for. Also many lenders have thresholds in the loan to value ratio at which the interest drops, I put a bit more in to my current places deposit to get a slightly lower rate for my fixed term.
He is young so should bank on some salary growth.
I bought a property at his age. At the time it was 5x my salary. A few years later it was 1x. Then i met someone i married. Today that property is an about 0.4% of our annual. This isn’t going to happen for everyone but it’s worth thinking about. Buying property that’s cheap only to have to move again is a worse shout given SDLT and fees.
I wouldn’t want money in equities with your timeframe OP, cash makes a lot more sense to me given it’s paying OK and you can shelter a lot of it by doing an isa transfer?
I bought a property at his age. At the time it was 5x my salary. A few years later it was 1x. Then i met someone i married. Today that property is an about 0.4% of our annual. This isn’t going to happen for everyone but it’s worth thinking about. Buying property that’s cheap only to have to move again is a worse shout given SDLT and fees.
I wouldn’t want money in equities with your timeframe OP, cash makes a lot more sense to me given it’s paying OK and you can shelter a lot of it by doing an isa transfer?
Shiklio said:
I know it would have been a wiser move to have drip fed into the stocks/shares ISA/holdings over the past few years, with the idea that there was a longer time period of investment, and therefore more time in the market/more chance of it working in my favour, however that time has gone, and my mistake for not doing so, and missing out on the upside of having done this. Particularly seeing how well the stock market has been performing post covid, which is initially what scared me off a little after having started investing a few years prior.
With the constant advice given being to become more risk averse the closer you get to needing access to the money, my question is, would you leave things as they are? Or succumb to the temptation to change the weighting from the current approximate 25-30% equities, 70-75% cash that I currently have it in, to a slightly higher equity weighting for the next 12-18 months when it is all withdrawn for the house purchase?
Important not to compound one sub-optimal decision by making another! With the constant advice given being to become more risk averse the closer you get to needing access to the money, my question is, would you leave things as they are? Or succumb to the temptation to change the weighting from the current approximate 25-30% equities, 70-75% cash that I currently have it in, to a slightly higher equity weighting for the next 12-18 months when it is all withdrawn for the house purchase?
Hindsight is 50/50. In retrospect you'd have been better off with more equities but 12-18 months is too short a horizon to pile in now.
I did something very similar by the way, I grinded my way to ~£150k cash savings during the period of unprecedented low interest rates and then bought a house in 2024 with a 4.6% mortgage (5x salary)
Now I've got the house, the mortgage payments under control, the emergency fund built up... now I am starting to take some risk.
LooneyTunes said:
A 6x mortgage? I’m well out of touch multiples but that would have scared the st out of a 20-something me.
My advice to young people is always the same: think about how you can invest in improving your earning potential.
It won't be a 6x mortgage, will be a standard 4.5x max mortgage. When the time comes, my deposit will be greater, anticipate it to be in the region of 150-160k. And my salary will also be greater by then. If i'm honest, i'll be looking in the lower region of the quoted price range, the higher region was with some luck on my side (also being the current limit of a house purchase price with the current LISA limit).t out of a 20-something me. My advice to young people is always the same: think about how you can invest in improving your earning potential.
In terms of the earning potential, I'm quite happy in my job, and the salary now and projected salary over the coming years. Not something to write home about, but i'm happy to stay doing what i'm doing and with the knowledge of what my future earning potential is likely to be.
greengreenwood7 said:
my 2 cents:
1/ capital preservation
2/ 'moment in time'
3/ risk vs reward - how the numbers may make a diff to 'real life'
I appreciate this response, its given me bit to think about and summarised the key considerations very well, so thank you. As you mentioned, the timeframe is not set in stone, its just an ideal. Although I wouldn't be ecstatic about it, if it came to it, i'd be willing to spend another year at home, albeit if its my own doing from poor decision making, it may leave a sour taste. But the contrary may also happen, something i'll have to weigh up. Again, same goes for that said number "X" of whats an acceptable loss.1/ capital preservation
2/ 'moment in time'
3/ risk vs reward - how the numbers may make a diff to 'real life'
Edited by Shiklio on Thursday 27th February 22:15
RizzoTheRat said:
Would scare the st out of me now I'm older and earning more too.
My approach when buying has been to set myself a target repayment amount that I'm comfortable being able to pay back, and then work out what loan size that works out to be, taking in to account possible increases in the mortgage rate, which of course relates to how long you're fixed for. Also many lenders have thresholds in the loan to value ratio at which the interest drops, I put a bit more in to my current places deposit to get a slightly lower rate for my fixed term.
Again noted, this is something i've not spent much time thinking about. A quick look on a mortgage comparison site, at current rates, with the amount i'll be looking to borrow, the repayments will be in the region of 12-1600 per month. More than manageable (Don't worry, i'm not forgetting the other running costs - council tax, utilities, groceries, rainy day funds etc. on top of all other non-house related outgoings). Plan is to let out a room or two, and make use of the tax free allowance that comes with this. At least in the short term. Things may change. I'm hoping to be at the 60% LTV ratio anyway, to get a favourable rate. And all being well, the rates should hopefully be slightly lower next year than they currently are.t out of me now I'm older and earning more too. My approach when buying has been to set myself a target repayment amount that I'm comfortable being able to pay back, and then work out what loan size that works out to be, taking in to account possible increases in the mortgage rate, which of course relates to how long you're fixed for. Also many lenders have thresholds in the loan to value ratio at which the interest drops, I put a bit more in to my current places deposit to get a slightly lower rate for my fixed term.
okgo said:
He is young so should bank on some salary growth.
I wouldn’t want money in equities with your timeframe OP, cash makes a lot more sense to me given it’s paying OK and you can shelter a lot of it by doing an isa transfer?
I wouldn’t want money in equities with your timeframe OP, cash makes a lot more sense to me given it’s paying OK and you can shelter a lot of it by doing an isa transfer?
Hustle_ said:
Important not to compound one sub-optimal decision by making another!
Hindsight is 50/50. In retrospect you'd have been better off with more equities but 12-18 months is too short a horizon to pile in now.
I did something very similar by the way, I grinded my way to ~£150k cash savings during the period of unprecedented low interest rates and then bought a house in 2024 with a 4.6% mortgage (5x salary)
Now I've got the house, the mortgage payments under control, the emergency fund built up... now I am starting to take some risk.
Maybe not what I wanted to hear, but maybe what I needed to, in regards to not following through with taking on any more risk on the timeframe that i'm looking at. I won't be jumping into a house that I don't see myself happy with in the medium term at the very least. So don't plan on having to worry about any recurring SDLT/Fees for some time.Hindsight is 50/50. In retrospect you'd have been better off with more equities but 12-18 months is too short a horizon to pile in now.
I did something very similar by the way, I grinded my way to ~£150k cash savings during the period of unprecedented low interest rates and then bought a house in 2024 with a 4.6% mortgage (5x salary)
Now I've got the house, the mortgage payments under control, the emergency fund built up... now I am starting to take some risk.
That is definitely the plan once i'm settled in, the risk profile will definitely be sitting higher than it currently does once the mortgage is underway and i'm back in a position of having some money set aside.
Many thanks to you all, you've given me a lot of food for thought.
This all depends on your appetite for risk. I wish my son was as good as you financially. I'm retired now and manage my own investments. I've read up a lot and follow a lot on this forum so I'm pretty clued up now compared to when I started my journey.
I wanted to pass on my knowledge to my son so that he has the best start for saving for his first home. He enjoys spending too much to follow my advice fully. If he had listened to me fully then he would be quite close to what you are doing right now.
In other words, as long as your appetite for risk is not too bad then I would stick with what you have at the moment. You have some risk with some of the investments in equity but I think it is worth keeping that level of risk at the relatively small % allocation.
I would not increase any investment in equity given your current position. Make sure those investments are globally diversified. The speculative word on the street is that the S&P500 is pretty maxed out but Europe and Asia may gain. But then who knows so that's why I would keep it globally diversified in an index tracker fund e.g. HSBC FTSE All World Index, Vanguard VWRL, Fidelity equivalent etc.
As you save more from now I would be putting that in your other pots - premium bonds, cash and as suggested short duration government bonds. It might be easier with an active saving account like Hargreaves Lansdown (not the best interest rates but as bank accounts start to reduce their rates then it is easier to manage when jumping from one account to another).
I wanted to pass on my knowledge to my son so that he has the best start for saving for his first home. He enjoys spending too much to follow my advice fully. If he had listened to me fully then he would be quite close to what you are doing right now.
In other words, as long as your appetite for risk is not too bad then I would stick with what you have at the moment. You have some risk with some of the investments in equity but I think it is worth keeping that level of risk at the relatively small % allocation.
I would not increase any investment in equity given your current position. Make sure those investments are globally diversified. The speculative word on the street is that the S&P500 is pretty maxed out but Europe and Asia may gain. But then who knows so that's why I would keep it globally diversified in an index tracker fund e.g. HSBC FTSE All World Index, Vanguard VWRL, Fidelity equivalent etc.
As you save more from now I would be putting that in your other pots - premium bonds, cash and as suggested short duration government bonds. It might be easier with an active saving account like Hargreaves Lansdown (not the best interest rates but as bank accounts start to reduce their rates then it is easier to manage when jumping from one account to another).
leef44 said:
I would stick with what you have at the moment. You have some risk with some of the investments in equity but I think it is worth keeping that level of risk at the relatively small % allocation.
I'd agree.~30% in equities and ~70% in cash seems like a decent split to me based on what you want to do / the timescales you have - If the markets keep going up, then great - If they go down (even 30% in the next 18 months), then not so great, but also not so bad, as it would only be ~10% of your total.
Shiklio said:
Hello.
Just looking for some advice in regards to my finances and my plan to buy my first home.
For context, mid-late 20s, living with parents (in the south east).
Currently earning ~ £50k per year, putting away approximately £1500 a month of my paycheque. (In case it is relevant, public sector job with the pension to go with it - So that base is covered, unless I am mistaken).
Circa £130k saved for a deposit; this is what I'm asking for advice about.
I'm planning to buy a house in mid 2026 (12-18 months from now). Will be looking at houses in the 400-450k region in the South East.
Currently my savings are split approximately 28% in stocks/shares (All in ISAs), 22% in Premium Bonds, and 50% in various cash savings accounts/ISAs. I have maxed out my 20k ISA limit for this year. Have been maxing out my LISA limit for the past several years.
The stocks/shares are investments I made quite some time in ago and have not touched or added to for the past few years.
With the research i've been doing, I know it would have been a wiser move to have drip fed into the stocks/shares ISA/holdings over the past few years, with the idea that there was a longer time period of investment, and therefore more time in the market/more chance of it working in my favour, however that time has gone, and my mistake for not doing so, and missing out on the upside of having done this. Particularly seeing how well the stock market has been performing post covid, which is initially what scared me off a little after having started investing a few years prior.
With the constant advice given being to become more risk averse the closer you get to needing access to the money, my question is, would you leave things as they are? Or succumb to the temptation to change the weighting from the current approximate 25-30% equities, 70-75% cash that I currently have it in, to a slightly higher equity weighting for the next 12-18 months when it is all withdrawn for the house purchase?
Any advice would be much appreciated. With most people in my circle not being particularly financially clued up, essentially I am thinking out loud and seeing if anyone on here would like to give their two pence.
In the words of Charlie Munger - invert, work out what you don't want to happen and avoid that. Just looking for some advice in regards to my finances and my plan to buy my first home.
For context, mid-late 20s, living with parents (in the south east).
Currently earning ~ £50k per year, putting away approximately £1500 a month of my paycheque. (In case it is relevant, public sector job with the pension to go with it - So that base is covered, unless I am mistaken).
Circa £130k saved for a deposit; this is what I'm asking for advice about.
I'm planning to buy a house in mid 2026 (12-18 months from now). Will be looking at houses in the 400-450k region in the South East.
Currently my savings are split approximately 28% in stocks/shares (All in ISAs), 22% in Premium Bonds, and 50% in various cash savings accounts/ISAs. I have maxed out my 20k ISA limit for this year. Have been maxing out my LISA limit for the past several years.
The stocks/shares are investments I made quite some time in ago and have not touched or added to for the past few years.
With the research i've been doing, I know it would have been a wiser move to have drip fed into the stocks/shares ISA/holdings over the past few years, with the idea that there was a longer time period of investment, and therefore more time in the market/more chance of it working in my favour, however that time has gone, and my mistake for not doing so, and missing out on the upside of having done this. Particularly seeing how well the stock market has been performing post covid, which is initially what scared me off a little after having started investing a few years prior.
With the constant advice given being to become more risk averse the closer you get to needing access to the money, my question is, would you leave things as they are? Or succumb to the temptation to change the weighting from the current approximate 25-30% equities, 70-75% cash that I currently have it in, to a slightly higher equity weighting for the next 12-18 months when it is all withdrawn for the house purchase?
Any advice would be much appreciated. With most people in my circle not being particularly financially clued up, essentially I am thinking out loud and seeing if anyone on here would like to give their two pence.
Edited by Shiklio on Thursday 27th February 02:04
Rather than going more equity, flip the question around, how much extra % do you expect the equity to earn over 2 years. The average over long term is 10% pa, so about 5-6% pa over deposits, so maybe 10%. So 10% of 30% is 3%. 3% will not make any difference to anything. But what if there is a bad 2 years and you lose 50% of equities or 15% of your deposit. Is that loss enough to knock you off track or at least make you very annoyed.
I think you are doing very well, the investments have done well, maybe time to relax and cash in. If you do want to have more equity exposure, have a look at your pension and see how that is looking. That has another 40 years to go, so plenty of time for equities to recover and outperform. Choose the right savings vehicle for the right risk.
Also I would second the gilts - look for "low yield gilts and tax" on google. Consider shifting the premium bonds into gilts and get the extra return.
If I was your parents and finished the mortgage already, I would gift the house to you (save from inheritance thieves) and slowly move somewhere warmer and nicer, retire. So you keep investing your savings at best 
But anyway, have a look at the recent research below, it does give some good points (and tools) based on regions about rent or buy decisions.
https://www.man.com/insights/sunderland-or-sussex-...
But anyway, have a look at the recent research below, it does give some good points (and tools) based on regions about rent or buy decisions.
https://www.man.com/insights/sunderland-or-sussex-...
Would you be in a position to move forward with a purchase now?
If you wait it out, with most of your savings in cash - you might find that 400-450 budget needs to become 450-475 by next summer. (or worse)
Given its a 3-4 month process to buy somewhere, what financial situation might you be in by say August?
As you are living with parents can you ask them if you can pay no rent (assuming you do) for a few months. Maybe boost that 1500 a month, go ultra frugal for a few months.
If its tight, whats in the £375k budget range? Anything suitable? Because thats what you will be buying in 18 months....
That's what I would do. I see no point in waiting it out as the market is forever moving under your feet.
If you wait it out, with most of your savings in cash - you might find that 400-450 budget needs to become 450-475 by next summer. (or worse)
Given its a 3-4 month process to buy somewhere, what financial situation might you be in by say August?
As you are living with parents can you ask them if you can pay no rent (assuming you do) for a few months. Maybe boost that 1500 a month, go ultra frugal for a few months.
If its tight, whats in the £375k budget range? Anything suitable? Because thats what you will be buying in 18 months....
That's what I would do. I see no point in waiting it out as the market is forever moving under your feet.
My only advice would be to move out of the cesspit that is the south east of England. Overun with too many selfish people,
I’m in Bristol which is expensive but I was shocked that my house that was £257k here was £550k in Essex! I thought god why does anyone bother! It’s only a bloody 3 bed 800sqft!
Glad my parents moved us out when we where 13
I’m in Bristol which is expensive but I was shocked that my house that was £257k here was £550k in Essex! I thought god why does anyone bother! It’s only a bloody 3 bed 800sqft!
Glad my parents moved us out when we where 13
If it's a public sector job you cannot bank on any meaningful salary growth really either. No bonuses. Even if you get promoted in the civil service the pay rises aren't life changing by any stretch of the imagination, maybe another 2/300 a month if you're lucky.
A x6 mortgage in those circumstances doesn't sound ideal I have to say.
A x6 mortgage in those circumstances doesn't sound ideal I have to say.
princeperch said:
If it's a public sector job you cannot bank on any meaningful salary growth really either. No bonuses. Even if you get promoted in the civil service the pay rises aren't life changing by any stretch of the imagination, maybe another 2/300 a month if you're lucky.
A x6 mortgage in those circumstances doesn't sound ideal I have to say.
But someone who has got to £50k in public sector in their twenties appears to be different to the average no?A x6 mortgage in those circumstances doesn't sound ideal I have to say.
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