general advice needed

lee26g

Hi there,

I was just wondering what your thoughts might be on my situation.

I currently have £120k in savings which has taken a very long time (and a bit of luck) to accumulate, and I currently have a perm job (for 3 months now) with a salary of £45k a year.

I am single, have no commitments or debt, and no strong ties to family.

I am looking to get on the property ladder for the first time, but I want this to be a good investment for the future.

I currently rent and work in London, but I also know Bournemouth quite well.

My original thoughts were to buy a property both in London and Bournemouth, as I know people in Bmth who I could leave in charge of the one down there and rent it out. However after looking at the London market I think all my money would have to go into getting a property here now.

Would it be better just to spend the whole lot on one place or split it over two? Ideally I would want to live in one, although I am not too fussed.

I see the help to buy scheme is only allowed if you only have 1 property. Is it worth looking into these schemes given my situation? with the equity loan and my large deposit I may be able to get something impressive?

I am thinking of targeting locations on or near Crossrail 2, 3 or HS2, perhaps the Old Oak and Park Royal Development (tipped to be the next Canary Wharf), or up and coming areas such as Lewisham, Manor Park, or Hither Green.

Any thoughts are much appreciated.

Thanks

Cornucopia

It very much depends on what you want/what compromises you want to make.

Also, whether you want to be in Bournemouth longer-term?

Also bear in mind that you are already in the 40% tax bracket, so any rental profits will be taxed at 40%, and any non-exempt capital gains at 28%, so this might make a difference to the sums.

BitterAndTwisted

Buy a property to live in, where you think you'd be happy in the long-term, not where you think it would be the best investment. None of the places you mentioned I would want to live, not even short-term. Life's too short to live in a dump, even if you think it's up-and-coming. That up-and-coming could take a couple of decades to happen, meanwhile you're living in a !!!!!!-hole.

Cornucopia

Have you been to Hither Green?

Pixie5740

Buy a home you'll be happy to live in. If there's any money left over after the purchase then think about investments.

jonathanrolande

It’s a nice dilemma. It’s an impossible one to answer without knowing a lot of info and background/ambitions etc but tax is a consideration. Any profit on your own home is free of tax so personally I would look for a nice place for myself first and start saving all over again for the B2L.

Hoploz

Home in London, best you can afford - it's worth maxing out as the return on the capital investment will be best here as prices will rise more % in London, and you want to live in a decent place. But keep 10-15k back for a deposit on a holiday home or BTL in Bournemouth. That's what I'd do.

Others may disagree but this is my opinion (and this is along the lines of my own situation)