fixed rate bonds question

badger09 · 5 October 2016 at 6:36PM

sazdes wrote: »

My objective is a house deposit, but I didn't realise before I applied to medical school I'd be moving around the country annually so that's now realistically a bit infesible for another 10 years until I've fully trained unless I can get a buy to let mortgage and then use that rent to pay my rent elsewhere in the country maybe - can we use help to buy ISAs towards buy to let mortgages?

Parents may buy another house closer to home (their second home was bought 250miles away for me to live in at uni/rented out for a few years later) or else just keep it in savings accounts for retirement, they're very scared of investment side of things unfortunately so only have a few shares from dads old work company but wouldn't let me invest in stocks (plus I need to read up a bit more before considering it)

Thanks

No ........

AlanP_2 · 6 October 2016 at 12:30PM

For your parents I would suggest that they meet with 2/3 local Independent Financial Adviors and then engage one to act as their advisor.

They can look at their overall financial situation (savings, pensions, life insurance and all the rest of it) and make suggestions on what their best options are.

You say they are scared of the investment side of things. This is quite common and ends up with people keeping everything in cash (which they perceive as low risk)- which can lose out to inflation and is a finite pot so can run out in retirement.

Investments can achieve higher growth than inflation and the returns can be more than the sums withdrawn each year to live on so the pot is "self perpetuating" if you like.

Sticking to main stream, diversified investments aligned to their needs is what the IFA can assist with so they might end up with £90k Cash and £90k invested, or £30k Cash and £150k invested for example to suit their circumstances.

As for yourself if it will be 10+ years before you buy a property then consider a S&S ISA as that is a sensible time to "invest" over as opposed to "save" as cash. Personally I would look more into BTL near your parents / home area as the longer you wait to get on the property ladder the more expensive it will be I suspect.

Dan83 · 6 October 2016 at 6:09PM

If your willing to risk it all, have you considered P2P?

sazdes · 6 October 2016 at 6:15PM

thanks, if I was to buy a house near one of my allocated areas and live there for that year, but my second year be too far to commute to, how likely is it to get consent to let on a residential mortgage as I'd be concerned regarding early redemption fees if I had to remortgage at that point to get a buy to let mortgage, or is it fairly straight forward just more expensive? Obviously I want to have a residential mortgage first to be able to take advantage of my help to buy isa

Thanks

System · 6 October 2016 at 6:26PM

Have you considered share or property funds? Some risk but buy and hold over the long term reinvesting dividends and you should be fine (don't buy and sell for short term capital gains, don't try to time the market)
Point being - if you're prepared to buy property, which can go down in value as well as up, then why not shares?

System · 6 October 2016 at 6:27PM

Just don't sell shares during a crash, like you wouldn't voluntarily sell a btl property in a housing crash

sazdes · 8 October 2016 at 4:34PM

thanks, hadn't considered it as hadn't heard of it before but will read up on it

is getting consent to let guaranteed/fairly straight forward at a price or is it better to sell a residential place and buy a BTL if I am placed miles away for my second year job?

thanks

System · 8 October 2016 at 8:21PM

Sazdes - if you invest in a fund that invests in property, it'll be spread over a much larger portfolio than you could do yourself, so less risk from bad tenants or vacant periods, and you can just put small amounts in if you want to. You can do it through an isa or sipp pension to get tax advantages that you wouldn't have with buy to let and you wouldn't have all the legal responsibility and conveyancing process.

But the advantage buy to let has is that it can leverage - I'm assuming property funds dont do that. And you might personally spot a bargain, but that's hard

Nevertheless i do share funds rather than property, as they return better and have better liquidity. My isa mostly tracks the FTSE all share index and my sipp is global small companies (lots of room to grow)

Westie983 · 8 October 2016 at 10:37PM

sazdes wrote: »

thanks all!
currently have
halifax reward
tesco current acct - £3k full
4% monthly kent reliance £500/m Its now 3.25%
TSB x2 £2k full
tsb regular saver 250/m
first direct regular saver 300/m
marks and sparks reg 250/m
nationwide reg saver £500/m (my 12m of nationwide acct are up so can't use it)
club lloyds £5k
regular club lloyds £400/m
BOS £5k

current total of 37k, adding £1500 to that each month. I need to open some more BOS and a HSBC accts but because the NHS makes me move around the country annually, its not letting me pass the credit check at present :mad: My parents will soon have 180k I need to store away for them and they have all of the above accts too

Kent RS rate has dropped to 3.25% from the 1st September.

Is your TSB joint a/c or a sole account? You could also open another Tesco A/c as you can have two of these, when your issues with your address are addressed or you find a stable address.

paddypaws101 · 11 October 2016 at 11:56AM

MatthewAinsworth wrote: »

. You can do it through an isa or sipp pension to get tax advantages that you wouldn't have with buy to let and you wouldn't have all the legal responsibility and conveyancing process.

Nevertheless i do share funds rather than property, as they return better and have better liquidity. My isa mostly tracks the FTSE all share index and my sipp is global small companies (lots of room to grow)

I don't want to crash the OP's thread. but how would one set up an ISA or SIPP like that, would one need to go through an IFA?

fixed rate bonds question

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