How to use £160K to support me for the next 30 years?

jamesd

Cautious Investor is right about long term CGT advantage of your own home. However, there is an alternative for letting that can be useful. That's selling your own place and moving into a property that needs substantial refurbishment, then letting it out. Under current rules this will get you both several years worth of capital gains relief and also letting allowance. Repeat a few times until all of your capital is invested in this and/or other investment vehicles and producing an income.

This can also be quite efficient and I'm potentially looking at a return on capital invested* in the 25% plus range on a property that needs quite a lot of internal refurbishment, ignoring capital value changes. It's not readily possible to obtain that sort of return on stock market investments long term. Buying at a low price and the refurbishment are important, because the increase in value makes it possible to extract some of the deposit and upgrading costs. A high loan to value also matters to the possible return, since low LTV increases the amount of capital invested and decreases the return per Pound invested.

You should also keep enough cash for a few years of living costs plus doing at least one major refurbishment after a tenant wrecks a place.

Don't repeat too many times or HMRC will rule that you're a property developer and your capital gains on refurbishment will be treated as normal income, not capital gains.

If Ally1205 was to start on this approach the first step would be taking out a 75% LTV offset mortgage on their own property. Next would be finding a place nearby that needs lots of internal refurbishment but no major structural work and is a forced sale. Buy for cash, refurbish, move in, file PPR notification with HMRC, switch original home to a BTL mortgage and let it out. Port original mortgage to new place (value will be lower). Repeat with the next place. Expect it to take a few years to get say five properties that will give a fair chance of not losing too much of the income at one time.

*Return on capital invested = (rental income less costs) / (capital invested [deposit and refurb costs]).

de1amo

i would see what mortgage the OP could raise to fund the adventure abroad --a buy to let basis--then do homework on places abroad--there are expat sites for most countries--go to the place of choice and rent abroad --rent the original home out for a year and see how it goes from there!