House Purchase Post: Part 1

So much to write on this, so I’m just going to talk about the money side of buying my house first.

Bloody ‘ell, BTL

The plan had originally been to sell my buy-to-let (BTL) flat to fund my house purchase. However, my flat is caught up in the cladding polava and unless I wanted to make a massive loss by selling it to a cash buyer, that route was closed to me.

So plan B was to attempt to remortgage, to release some equity.

Alas, the lender valued my flat at a big fat ZERO as it did not conform to the new fire safety regulations.

To pile on more financial stress, the service maintenance charges on my BTL for the past year have trebled, to pay for a Waking Watch.  Although I believe a new fire alarm system has now been installed resulting in the WW no longer being employed, I have yet to see what the final bill will be to ensure that my flat will fully comply with regulations and secure the coveted EWSI certificate which will allow me to sell the property. I have already been advised that us leaseholders will not qualify for full government rebate, so await with dread on how much more I will have to pay.

Since I couldn’t release any equity, I had no alternative but to accept the loan from my parents and dip into my Future Fund.

The BTL has been a good investment but I will very likely be selling it – receiving rental income isn’t part of my FIRE plan. Assuming prices haven’t plummeted for such properties in the area, the equity I get from the eventual sale should repay the family loan in full and might even fill the hole that has been made in my Future Fund.

Dead Pledge

As per a comment I made on Monevator’s recent post which suggested that making payments on a mortgage was a form of saving, it was with some trepidation that I took on board the biggest debt of my life (on my own) at an age when many are (or close to being) mortgage-free.

At my age (the wrong side of 50), the length of the mortgage term was restricted – I certainly wasn’t offered 30-year deals!

As I went through the application with the mortgage advisor (which was all done online and over the phone, versus the face-to-face interview at the building society which I had for my first mortgage, armed with paper copies of my bank statements and payslips!), I was surprised at how much I could borrow on my own.

Some would say ‘get the biggest house/mortgage you can afford’ with these (current) low interest rates, but since I’m still aiming for FIRE, I was mindful of the size of the mortgage payments. I didn’t want to feel like the mortgage was a noose around my neck, it needed to be affordable and I needed to be comfortable with it.

So in the end, my budget didn’t cater for the biggest house I could get and I ended up with a mortgage with a LTV (loan to value) of 64%, which gave me affordable repayments and a bit of spare which I will need to split between saving for FIRE and a fund for future ‘house renovations’.

There will be some who will think that the deposit I made should have been smaller, that I could have invested the extra cash and made the most of investment returns. I did consider that but knowing me, it would have just caused me both investment stress and stress over higher mortgage payments so I did what I did for better peace of mind.

Anyway, I’m on a 2-year fixed repayment mortgage, 1.25% interest. It makes my mind boggle that the interest rate for my first mortgage over 20 years ago was 8% – let’s hope we never see those kinds of numbers again!

My mortgage term is 22 years so I’ll be in my early 70s when it’s paid off (earlier of course if I make overpayments).

How do I feel about carrying such debt into my old age?

I didn’t feel comfortable with it at first but it’s likely that when my DB pension kicks in at age 65, the 25% lump sum can more or less clear the balance of the mortgage, so I will have options when the time comes.

My mortgage payments will be more than what I am paying my parents for living in their house but at least my utility bills will be lower, which will provide some offset. However, until my parents sell their house, I will be paying 2 lots of bills but I chose to do this rather than be caught in a chain.

My savings rate will unlikely to ever reach its previous dizzy heights but I’m resigned to this – I think if I can achieve a savings rate of around 10%, I will be happy with that until things settle down cost-wise. Need to be smarter with some of my expenses and hope that the stock markets continue to do their thing for my portfolio.

Other House-Buying Costs

I wasn’t planning to get my property during the stamp duty tax holiday so I didn’t join the frantic and desperate race to try to complete before the end of July, although there had been a chance to complete before the end of September to pay a reduced amount. Sadly, this didn’t happen (the seller and then my solicitor were on holiday so three weeks were lost) so it was with a grimace that I paid out over £7k in stamp duty – ouch!

With some time on my hands before I move in, I decided to get all the rooms redecorated/painted, new carpet, floor tiles and fitted wardrobes.

Getting people in to do all the work during such a busy period has been a right pain and the labour costs have not been cheap – I feel like I’m just bleeding cash and will be so glad when it’s all done.

I do have an actual moving in date set but still so much to do (and pay for) before that happens but at least things are moving forwards.

 

September 2021 Savings, plus other updates

A quieter month at work, which was just as well as there were occasions when I was feeling somewhat overwhelmed by everything, leading to a couple of (rare for me) sleepless nights.

I also seem to have lost some weight without trying, despite eating, drinking and going to the gym as normal – this has happened to me in the past before, where I think I’ve lost weight due to stress. Not sure how I feel about this, I don’t need to lose any more pounds.

I realised that some things in my life were being neglected, delayed and put off, and it was like my life was beginning to spiral out of control.

For the first time in years, I renewed my house and car insurances with the same companies, instead of shopping around. I’m normally prepared well before the policies run out but I just didn’t have the energy or inclination to find cheaper deals. As it was, the new policies weren’t too far off (though both more expensive) from what I’d paid previously but my head needs to be more organised next time.

Towards the end of September, I finally got all my personal health stuff sorted, which had been preying on my mind and feel much better after attending delayed appointments for eye test, smear test and breast screening test – all out of the way now for another 2-3 years.

I should be picking up new glasses later in the month and have gone for budget rather than designer – am past caring right now and no one notices what I’m wearing anyway (apart from family).

I knew I wasn’t quite myself this month when I found myself wanting to cancel on social events, but I went in the end and of course, I was glad that I did.

The above all might sound a bit glum but I’m actually ok, I’m not unhappy or anything, just got a lot going on in my head.

Things continue to progress at a slow pace on the house front but I’m getting there.

So, how did I get on with my savings in September?

I saved 14.4% of my net salary.

The above includes another £25 Premium Bond win, a £10 charity lotto win, £20.21 from doing Prolific surveys and £48.89 affiliate income from OddsMonkey.

Shares and Investment Trusts

I sold out of Greencoat UK Wind for a small profit – although I’ve enjoyed receiving dividends from this investment, I’ve recently felt that I was a bit too exposed to thematic energy, plus not being comfortable about the uncertain future of green energy prices. Reinvested the cash in new holding Middlefield Canadian Income Trust, a region I didn’t have any real exposure to.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

I’m glad I did get to celebrate hitting my £250k milestone last month because there was a rather large wobble in the markets this month and I saw my first real drop this year. Future Fund is down to £243,768, plummeting depths like that submarine in the daft (though enjoyable) TV mini series ‘Vigil‘.

When I come to withdraw the funds for the house purchase, there will be an even bigger drop but the good news is that I won’t be selling in a depressed market to get my funds – I’ve been selling bit by bit over the summer while the markets were relatively high(er) so equities sold have been at a profit.

Dividends and Other Income

Yet another record-breaking month for dividends:

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August 2021 Savings, plus other updates

Well, the big highlight this month is that my Future Fund reached £250,000!

Woohoo, I’m a quarter of a million millionaire 🙂 🙂 !

I’d planned on doing a separate post dedicated to celebrating this milestone but decided to relegate it to just a highlight in my usual update because once my house purchase goes through, I’ll be withdrawing a chunk of cash, so in my mind, I’m not really there yet.

And yes, the house purchase business rumbles on – a big post about it once it’s all over. Still so much to do.

I waiver between being really excited/stressed about it and working madly on decluttering etc, to days of complete apathy where I just binge-watch tv or play video games because I can’t face it all.

Fortunately, all that needs doing by me (for solicitor etc) is up to date, it’s the sorting of the house and my/the family’s belongings which is completely doing my head in. But I will get there of course.

Anyway, I’ve finally been successful growing some tomatoes (cherry) –  so chuffed with these, which have been great in salads:

So, how did I get on with my savings in August?

I saved just 13.5% of my net salary.

The above includes another £25 Premium Bond win!

Shares and Investment Trusts

No new investments, I just topped up existing investments.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

I’ve been too busy/distracted to know what the markets were up to this month but whatever, there was a decent jump and my Future Fund ended up at £250,171!

Dividends and Other Income

A record-breaking month for dividends:

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July 2021 Savings, plus other updates

Meant to get this update out over the weekend but just couldn’t get round to it.

Some recent highlights:

  • Been enjoying a fantastic summer of sport – first the highs (and lows) of the Euros football, then Wimbledon tennis and then, one of the reasons I didn’t get my blogging act together over the weekend was because I’ve been too busy catching up on the Olympics. Love it all, c’mon Team GB! I’ve even been watching some of The Hundred cricket (men and women) – finally, cricket scores I can understand, haha!
  • Also been enjoying eating (and having a laugh at – see end of post 🙂 !) some of the veggies I’ve grown – spring onions and courgettes have been flavour of the month. Got some tomatoes on the go too so greenfingers crossed those will be ok seeing as I failed utterly with them last year. Carrots didn’t fare so well this year sadly. But yes, it all seems to taste better when you grow them yourself!

My spring onions have sprung!

  • I’ve been back to the office. As mentioned previously, I can continue to WFH 100% but I’ve chosen to go in (once or twice a week) to see my colleagues/other people. I was very unproductive on the days I was in – seems like I will have to learn to work amid the distractions and noise of an open office again –  but it was very nice to see everyone. Interesting to note how ‘back to the office’ has affected different people, ranging from utter joy and relief in some, to (sadly) panic attacks in others. One of my friends is back in the office 5 days a week again – the novelty has worn off already but it’s a new job so she’ll see how it goes.
  • Had a couple of social outings with friends – I would love to keep the table service and not have to ever queue at the bar again!
  • My nephew’s recent birthday present has given us a new and somewhat topical game to play on our weekly boardgame nights:

There was a lot of pressure to win this one!

  • And finally, I have found a house and my offer has been accepted! I won’t say any more right now, but the next few months will be rather busy. I feel both relieved and anxious. I’ve started my big decluttering exercise – 24 bags to the charity shop so far (not all mine, some of them ‘family’ stuff) and it’s barely made a dent… Suffice to say I’ve also just started reading Marie Kondo’s book for some inspiration… (thanks to SavingNinja for the copy).

Anyway, how did I get on with my savings in July?

I saved 13.5% of my net salary. House-purchasing fees (solicitor, conveyancing etc) means I need to put aside a chunk of cash to cover these (and any other expenses) so my savings rate will have to suffer until this is all sorted. There goes my goal out of the window but needs must.

The above includes top ups £37.03 from doing surveys with Prolific.

Shares and Investment Trusts

One new investment, I bought some shares in Aberdeen Diversified Income & Growth Trust, another investment trust as part of the dividend-paying part of my portfolio.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

Apparently the markets were down this month due to share sell offs, but my Future Fund didn’t get the memo and ended up at £244,342, so continuing in the right direction.

However, I now know that I will definitely have to use some of these funds for the house purchase so there will be a chunk taken out, which will sadly mess up my nice graph and likely have impact on my FIRE plan, just when I’m so close to my next big milestone.

Dividends and Other Income

A decent month for dividends:

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