Saturday, 11 May 2013

Is This My Beautiful House?


This is a difficult post to write as I don’t want to come across as a whining poor little rich girl.  I am acutely aware that I exist within a very small percentage of the population, when it comes to our personal wealth, and I really do consider myself immensely privileged.  However, we do live among a larger group of people who are living in a bubble which will inevitably burst.


David and I live in a beautiful house in Forest Hill in South East London.  It is Edwardian and has lovely wide rooms with high ceilings.  It is packed full of every toy you could imagine, TVs, computers, games consoles, DVDs, books, endless musical instruments etc, you get the picture.


On the surface we look as if we have made it.  But the stark reality is that in eight years we have to vacate the house as we will not have come close to paying off the mortgage.  Don’t get me wrong, we will have a large amount of equity in the house, so we will not be on the street but it feels very strange to know that the place you have called home, and that you love, is never going to be truly yours.

Quite recently we made a massive stride forward, by paying off one of our long-term debts but this has been countered by taking on the additional burden of Elliot’s new school boarding fees, which are not cheap.  Not for a minute do I regret this decision (I will be writing about this in another blog post soon) but it has further complicated our financial position and is a commitment we have to undertake for the next three years.


The radical in me wants to jump ship now, downsize, move out and on and release us from all the debt that we have accumulated, put aside the money for the school fees and start saving rather than paying out in endless interest payments.  The investor in me says no, don’t do that, stay put for as long as you can, get an extension on your mortgage, pay off as much as you can and trust that you will get back way more in growth on the capital when you sell the house in 8-15 years.

David is conflicted about this too.  He pretty much hates his work (has always done so) and would love to reduce his financial commitments so that he could spend more time doing the things he loves (playing drums and drum restoration).  But he is a big guy (6ft 6”) and loves our house with its high ceilings; downsizing for him is a massive deal and I think in some ways he would see it as a personal failure (this is not to say that he sees other people’s decisions to do this as such).


He is a very ambitious man and sees the problem differently; he wants to find a way to make the money so we don’t have to make that kind of drastic decision and can keep what we have.  He is currently on the brink of a deal with one of the major banks to provide business software.  This could prove very lucrative, and will be a massive personal achievement, but it will mean more of the same stress, hard work and grind and we both aren’t getting any younger.

The problem I have with the latter approach is that we are just not living now.  We have a good life, enjoying all our toys, but over the last few years we have done so little in terms of adventure.  We so rarely go away now as we simply can’t afford to and we both seem to work harder and harder just to stay still.  I am proud of what we have achieved, we have built everything we have by ourselves, ensured our children have had the best education we could afford, and we have probably done enough so that we won’t be destitute when we retire, but is it so wrong of me to want to have the freedom to do more?


So why am I telling you this story?  Because there are lots of people out there like us who are stuck in this fairy tale and don’t talk about it.  It started for us when we were sold a magical endowment plan about 17 years ago and when we believed that living in a big house and making that house bigger and bigger and stuffing it full of more and more things was the answer to all our problems.  Now the fairy castle we live in feels cursed and not so magical anymore.

I went for a meeting with a mortgage advisor last week and she said that she was seeing people on a daily basis who have buried their heads in the sand and have less than six months to run on their interest free mortgages, have very little equity, and are begging the bank to help them stay in their homes which they love.  The only option the bank has under new and necessary FSA regulations, in many of these cases, is to show them the way to the estate agents, a horrible end to a fairy tale dream.


Whatever we decide to do in the long term I don’t want it to end like that.  We do now have our heads out of the sand, and we can rationally understand our problem, but it’s not a very happy place to be.

Many of the posts on this blog are about my new found determination to make sense of this place I have found myself in, how I attempt to create a life richer in experience, joy and meaning for myself and my family, whilst trying to work out what we are going to do going forward.  I hope you stay with me on this journey and chat with me along the way.


(thanks to Issy and Elliot for the photos)

3 comments:

  1. A very brave post Louise, thank you for sharing. You're a captivating writer.

    It's a difficult decision to make, absolutely, but it would be a long 8 years being a slave to your mortgage payments. I left a PhD last year, because it wasn't for me, not the same I know, but the pressure on me to stay, and pretend that I loved it was huge. I finally made the decision to leave because it was impacting my health, and I've never looked back, nor saw it as any kind of failure. More that I realised that my time was precious, and that I didn't want to be miserable for another 2 years, more than miserable - unwell. It was a huge step for me to take because I don't quit things.

    There is a lot to think about here. you could sell some of your unwanted toys to raise a bit of money, think about some free ways to enjoy what you have, lessen the financial commitments in every other area of your life to make it slightly easier.

    It is certainly not wrong to want freedom to do more. it might not need to be holidays and massive adventures, but a reduction in the financial stress would make the day-to-day much easier. I hear your dilemma, your worry over making the right decision for your future.

    I guess I'm hugely passionate about this subject, so I hope I haven't been too challenging! :)

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  2. Hi Linda, thanks for commenting and no you haven't been too challenging - I wouldn't write about these things publicly if I was worried about that.

    At the moment I'm concentrating on valuing what I have and paying off as much of our debt as possible so that when we do move (whether that's sooner or later) we are in the best position possible and can make freer decisions.

    I want to get shot of lots of stuff at the moment, not just because it's not paying its way but because it actually stops us enjoying what we have. So much valuable space is taken up with un-used stuff that we don't enjoy the house as much as we should. We're having a massive yard/house sale next week and anything that doesn't get sold will be taken along to the local hospice charity. The money we make I am hoping to use on adventures with Elliot this summer - more to come about this in other posts.

    And this afternoon I sat down and repaired some socks I knitted for David a while ago and a favourite jumper - really satisfying!

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    Replies
    1. Phew, I worry about saying too much sometimes.

      paying off as much of the debt as possible is a great idea, so you can be a bit more flexible with your decisions.

      I agree, clutter can get in the way of enjoying our spaces, and I hope you feel better about the house once the house sale is out of the way. Brilliant, what a great way to spend money, adventures with Elliot!

      Experiences over stuff, I say. Well done for sharing your story. Look forward to reading more.

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