How much to spend on a house and what to do with the rest

[Toyoda]

Let's not ask how I got here as it's a very long and winding road but my current position is thus:

Age: early 40's, single, one child under 18 who spends majority of time with mother, I'm the archetypal weekend dad.
£300k in the bank(s), all funds easily accessible
No house (currently lodging with family), I was a previous homeowner but decided to sell a few years ago due to a change in circumstance. Combination of renting and lodging since then.
Currently unemployed but likely to be back in the workforce early 2026
20 yrs employer pension, will obvs need to get a new employer pension or look at private options for my remaining 20 years or so in the world of work.

I'm up in the north of England where property prices aren't huge and for reference £200k would get you into a smallish 3 bed detached new build, although tbh I don't really need the space and a 2 bed would suffice. Doesn't have to be a new build at all, that was just to give an idea. What percentage of my lump sum should be spent on a house and what to do with the rest?

I've obviously made several unwise decisions (both financial and otherwise) in life thus far to end up in my 40s and be in this position but it could be a heck of a lot worse. Assuming I can get back into work I need to get out of this lodging situation asap and get back into home ownership which I intend to buy outright.

Can the good people of give PH offer any advice please so that the second half of my existence doesn't leave me wearing an Oodie in a bedsit rueing the first half of my existence. Maybe I need to see a financial advisor for the best way forward? I used to get by on a wing and a prayer but I think my days of winging it proved I need some proper guidance. Thanks all.

Edited by Toyoda on Saturday 1st November 15:13

[borcy]

I'd probably start with the house, any specifics you need such as a garden, garage etc.
Then look at location. What are house prices like there?

Do you know what type of work you'll be going into? Full time or not, rough wage?

[Simpo Two]

I would get the 3-bed for £200K, keep a few K handy for contingencies and invest the remainder.

[Toyoda]

Wage initially is going to be likely half what I was on before, probably no more than a smidge above minimum wage. The reason for leaving my last employer and long period of unemployment won't help my prospects however I've never lived a decadent lifestyle and even a £25k salary with no mortgage should see me with some (albeit not a lot) of cash left over each month for a bit of fun. I just need an income rather than burning through my lump sum which I have been doing so far. Pride went out the window a long time ago and any employer happy to take me on a full time basis will do the trick.

As for the house, even £120k would get me into a house that would suffice, but I could push it significantly higher given the lumper I have in the bank, but it would be more for ego reasons plus potentially a nicer estate. If nothing else I'm a prudent man so I know a year's salary in the bank at all times is the bare minimum but I'm kinda after advice on what %split to spend on house/investments/pension top ups?/rainy day fund etc. Like would it be worth spending more on a nicer house now with a potential view to downsize when older? Or do I just buy a house that'll do me till the reaper comes knocking and do something meaningful with the rest of the cash? My days of looking for a woman are over, can't see myself ever wanting to live with anyone other than myself and my kid when they visit.

[LRDefender]

If this was me I'd be looking to buy a house in the nicest area possible and using whatever money I had to achieve that. Things I'd look for are low crime areas, nice schools and good transport links. These areas tend to do well when looking at house values especially during a downturn and this will help your investment grow.

Any cash left over then invest it in your pension or S&S ISA. Keep an amount of cash for any unexpected problems.

[Simpo Two]

Toyoda said:

As for the house, even £120k would get me into a house that would suffice, but I could push it significantly higher given the lumper I have in the bank, but it would be more for ego reasons plus potentially a nicer estate.

You can do better than 'suffice'; go for a bit more than you need now so you're futureproofed and in a decent area. There's only one of me in a 3-bed house but I could still do with more space.

[macron]

Hmm, budget coming up, may give you an incentive in stamp duty terms, as in who knows what bribes will be offered for buying at, say sub 250k. Worth looking now but deciding potentially v soon after it takes place.

Also will you be ok with working full time/ equivalent do you think? Obvs an incentive to have no mortgage as a "just in case", which I don't think is in doubt from what you're saying.

Wildcard, buy one at 120k and live in it. Buy another at 120k and rent it out and have a small income that way. May take the edge off income requirements? Obvs your maths may massage that to any number/ costs you may prefer within your overall cash available and what you may want to retain.

[Toyoda]

Simpo Two said:

You can do better than 'suffice'; go for a bit more than you need now so you're futureproofed and in a decent area. There's only one of me in a 3-bed house but I could still do with more space.

Yes thanks, I know what you mean, I've only really been in 3 bedded houses or bigger and having extra space isn't really a problem but for the first time in life I'm keeping a closer eye on expenditure and I'm just thinking more about the ongoing costs being higher the bigger you go - higher council tax banding, bigger spaces to heat etc although it's only incremental. I would need a parking space (this is PH after all!) so a driveway or numbered bay depending on the house type. Not bothered about a big garden, had one of those once and rarely used it, they're more for retired blokes and even then I can't see myself spending hours faffing around with my "borders".

I know it's very un-PH like as I've been round long enough to know this place is awash with powerfully built company directors (!!) but one thing I've learned in recent years is the value of humility and a simple existence. I'm lucky in a sense I've not been left potless so once I do get a low skilled job and a suitable house I'm pretty sure I'll be happy with my lot. It's funny how life can work out if you don't take the path expected of you but going forward as long as I've got enough to live on, can treat my kid every now and then, help them with uni costs etc plus retire in my 60's with enough pension to tick over that will do me nicely.

[muscatdxb]

You mention that you are in a bad position a few times, but a paid off house with still 6 figures in the bank and a pension isn’t bad from a financial perspective.

[omniflow]

My approach would be to find a house I liked, in an area I liked that was convenient for work and close to things I liked doing.

Then I would see how much said house costs. If it was close to every penny I had then I'd think long and hard about what my life would be like if I lived in that house with the amount of disposable income I would be left with.

If I decided it was too much money, then I'd look at the various factors - size, immediate location, wider location and see which I was happy to compromise on.

[alscar]

As you say your circumstances could be so much worse - in fact I’d say your position is actually pretty ok given you can buy outright with no need for a mortgage .
You don’t mention any Pensions so will assume none.
If £ 200k buys a 3 bed with parking space / garage that still leaves you £100k for emergency / investment.
Investment doesn’t have to mean stock market and even if say all in cash would get you around £ 4k pre tax with a mixture of fixed and limited and instant access accounts.
Then when a new job arrives you could assess.
If £150k buys you what you want ( and again assuming new build for “ease “and supposedly cheaper running costs “ ) but a 2 bed then that also makes sense albeit you may feel that is just too small for the longer term.
Location is key though - no point in spending these sums to find yourself in an area that isn’t nice !
Best of luck.

[Toyoda]

Thanks everyone so far, I appreciate the perspective being thrown on the facts.

You can probably tell my confidence has taken a big knock in recent years and after a pretty heavy MH crisis (I hate that term by the way and I'm certainly not here begging for sympathy from anyone) I'm finally ready to get back on the horse and just need a steer. Leaving myself to my own devices has proven to not work out well at all, that's why I'm trying to gather opinions on what a "sensible" person would do from this point forwards. Cheers.

[leef44]

LRDefender said:

If this was me I'd be looking to buy a house in the nicest area possible and using whatever money I had to achieve that. Things I'd look for are low crime areas, nice schools and good transport links. These areas tend to do well when looking at house values especially during a downturn and this will help your investment grow.

Any cash left over then invest it in your pension or S&S ISA. Keep an amount of cash for any unexpected problems.

I think this is a better approach. Hopefully this doesn't count as a second home for you (are you paying for the ex's house?).

By finding a better area, you are more likely to see the house grow in value and you can downsize later in life to release some equity (hopefully still tax free as long as legislation does not change).

Around £250k would be the right balance for me while keeping the other £50k in reserve for contingency of life's surprises.

[OutInTheShed]

Toyoda said:

Let's not ask how I got here as it's a very long and winding road but my current position is thus:

Age: early 40's, single, one child under 18 who spends majority of time with mother, I'm the archetypal weekend dad.
£300k in the bank(s), all funds easily accessible
No house (currently lodging with family), I was a previous homeowner but decided to sell a few years ago due to a change in circumstance. Combination of renting and lodging since then.
Currently unemployed but likely to be back in the workforce early 2026
20 yrs employer pension, will obvs need to get a new employer pension or look at private options for my remaining 20 years or so in the world of work.

I'm up in the north of England where property prices aren't huge and for reference £200k would get you into a smallish 3 bed detached new build, although tbh I don't really need the space and a 2 bed would suffice. Doesn't have to be a new build at all, that was just to give an idea. What percentage of my lump sum should be spent on a house and what to do with the rest?

I've obviously made several unwise decisions (both financial and otherwise) in life thus far to end up in my 40s and be in this position but it could be a heck of a lot worse. Assuming I can get back into work I need to get out of this lodging situation asap and get back into home ownership which I intend to buy outright.

Can the good people of give PH offer any advice please so that the second half of my existence doesn't leave me wearing an Oodie in a bedsit rueing the first half of my existence. Maybe I need to see a financial advisor for the best way forward? I used to get by on a wing and a prayer but I think my days of winging it proved I need some proper guidance. Thanks all.

Edited by Toyoda on Saturday 1st November 15:13

Main thing is to find a job you can be happy with.
If that means living in a more expensive location and having a (small by modern standards) mortgage, that might be better.
Jobs don't always last forever, I'd suggest trying to locate where there is more likely an ongoing choice of jobs.

At the moment you are free to work wherever, your son being the main tie. How long until your son is 18?

[Mark V GTD]

Toyoda said:

Yes thanks, I know what you mean, I've only really been in 3 bedded houses or bigger and having extra space isn't really a problem but for the first time in life I'm keeping a closer eye on expenditure and I'm just thinking more about the ongoing costs being higher the bigger you go - higher council tax banding, bigger spaces to heat etc although it's only incremental. I would need a parking space (this is PH after all!) so a driveway or numbered bay depending on the house type. Not bothered about a big garden, had one of those once and rarely used it, they're more for retired blokes and even then I can't see myself spending hours faffing around with my "borders".

I'm in a similar situation to yourself although I don't have £300k stashed away (lucky you!).

After 7 years in a 3-bed new build I have now accepted I never use the third bedroom, only need one bathroom and downstairs loo, have never once used the garden apart from mowing the grass and am more aware than ever that I'm paying for energy and council tax on property I am not using.

Now hoping to move to a 2-bed (max £200k) with a small garden and a driveway but can't sell the current house at the moment (its on the market but no interest).

In your shoes I would probably spend max £250k on the house and save the other £50k, although some of that will be gobbled up by legal fees, new carpets etc once you find the right property. Good luck!

[Simpo Two]

macron said:

Buy another at 120k and rent it out and have a small income that way.

IMHO he would be better off investing it than having tenants to wrangle with and the responsibility of running two houses. Been there done that! And Labour are making it even harder for landlords.

Toyoda said:

Simpo Two said:

You can do better than 'suffice'; go for a bit more than you need now so you're futureproofed and in a decent area. There's only one of me in a 3-bed house but I could still do with more space.

Yes thanks, I know what you mean, I've only really been in 3 bedded houses or bigger and having extra space isn't really a problem but for the first time in life I'm keeping a closer eye on expenditure and I'm just thinking more about the ongoing costs being higher the bigger you go - higher council tax banding, bigger spaces to heat etc although it's only incremental. I would need a parking space (this is PH after all!) so a driveway or numbered bay depending on the house type.

The great advantage you have is no mortgage, so that normally-huge overhead is gone. And you seem to have skills that will get you £25K+ a year, so as you seem fiscally very sensible you should be home and dry. An extra band of council tax isn't much and you only need to heat one bedroom

NB I hope your £300K isn't in a current account!

[AndyAudi]

With a bigger space you could rent out a room to cover some of the basic ongoing costs - tax free to a point.

https://www.gov.uk/rent-room-in-your-home/the-rent...

[Mark V GTD]

AndyAudi said:

With a bigger space you could rent out a room to cover some of the basic ongoing costs - tax free to a point.

https://www.gov.uk/rent-room-in-your-home/the-rent...

I have thought about that so many times - but I think the loss of privacy is too much to sacrifice however tempting the additional tax free income is.

[Toyoda]

Mark V GTD said:

I have thought about that so many times - but I think the loss of privacy is too much to sacrifice however tempting the additional tax free income is.

It's funny this is mentioned because many many years ago I had a girlfriend who did the very same. She had a modest 2 bed terrace and rented out one of her rooms for a few hundred quid each month to an immigrant bloke who seemed to work round the clock in the hospitality industry and mainly only came "home" to sleep. He was no trouble at all but it was kinda weird when I stayed over hers and this other bloke randomly appeared throughout the day/night who wasn't exactly a friend but lived in the same house. It wouldn't be something I'd be up for unless in dire straits financially.

[lizardbrain]

If you want to retire at a sensible age, I would put half your savings into the deposit and a third of your wages on the mortgage. And invest the rest

Which is a house price of 225-250 or so.. Not a huge amount but it s a number you can comfortably afford on your own

I wouldn t get sidetracked by mortgage vs no mortgage. It doesn t impact your net worth either way. Being mortgage free is psychologically appealing but unlikely to direct you to the best financial decision

Buying more house than you can afford isn t likely to help you long term