Buy to Let or Help to Buy??

Daniel54

josh1924 wrote: »

Why would I want a BTL? Because it has better returns than most savings and will mean I can buy more at a faster pace...

BTL is much higher risk than savings . It is an investment more akin to stocks and shares on the risk scale ( arguably higher) .It also attracts tax both on income and capital gains.


Are you maximising the return on your current savings on current accounts etc ?


HTB ISA offers an attractive risk free return


Buying your own home is always going to be a better investment than a BTL


I think those who have responded understand your question.It's not clear you understand the risks of financing and running a rental property


If I were you I would have no hesitation in saving into the HTB ISA and then buying my own home

bowlhead99

josh1924 wrote: »

Thanks for all of the responses.

I don't pay rent for the time being and won't be for the foreseeable future. Buying a house to live in is far from a priority.

I'm not really asking for the two to be compared so to speak. I'm more asking if the HTB ISA is too good to miss out on?

In a couple of months time I will have enough for a buy to let. What I'm trying to work out is whether I should go ahead with that purchase and forget the HTB ISA or if I should get the HTB ISA and acquire a buy to let in a few more years?

The HTB ISA is not too good to miss out on. Like I said, it's only £3k after five years and property prices will be higher by then anyway. It will just go a little way to offsetting that higher price.

It's free money and the bank and building society rates on your cash will be competitive because it's limited to such small balances compared to other savings accounts. So while it's certainly not the end of the world if you miss out, they are not a bad product.

As you might be aware, you can only put a relatively tiny lump sum into a HTB ISA. The rest must be drip-fed, quite slowly.

So it raises the question, if you have enough for an entire BTL deposit and maintenance/ voids fund, and you choose not to go ahead with that, how would you be investing the quite large difference between that amount you have ready to invest in a BTL and the amount you can fit in a HTB ISA?

The answer to that might perhaps give an indication of an even better use for your cash than starting a property rentals business. If you simply don't need a residential property to live in and would not save any rent by getting one, no real rush to do that, but no real rush to become a landlord either - plenty of other tax efficient and liquid investments exist.

josh1924

At the moment virtually all my money is in an ISA and interest paying current account.

If I don't need my own house yet (unless it's worth getting one soon). Where else can I put my money other than BTL?

Thanks guys for all the help

bowlhead99

For me the basics are a combination of high interest current accounts (including regular saver accounts which offer 4-6%), S&S ISA (not cash ISA) and pension.

Pension means you can't get it out until you're in your 50s so it sounds like it's not much good for buying a dream house in your 40s. But the benefit of locking the money away is you get tax relief, and sometimes employer matching, and if you have already contributed a nice big whack to a pension when young you will be more readily able to commit your monthly income to saving for a deposit or paying down a mortgage when you actually get closer reach the point that you want to get your house.

If you're likely to buy a house relatively soon (a few years), that might lead you not to commit much money to longer term investments but if you can live rent free for a while and want the flexibility to move around the country or internationally before you ever settle down, it could be a decade or more before buying a house is really on your radar, making a portfolio of S&S investments quite sensible for the meanwhile

If your tax rate is high, pension is relatively more valuable. Really, everyone's circumstances are different. You could invest in more education or skills via formal training. Or instead of investing money right away, why don't you 'invest' some time in reading some books on investment like you have presumably read some books on being a landlord when planning to start a business being one.