Where to put a house deposit

zharrt

I am in the process of selling a property, with the view to buy another but not for another 6 months or so, where would be the best place to stash approx £40k that will be used for the deposit of any new property, I am not after making money by investing with the capital as any risk is unacceptable, but I know having the money say in my banks (NatWest) standard Cash ISA (I am married an neither of us have used any ISA allowance this year).

I am looking for:

• Zero risk
• Easy access (no necessarily instant but not tied away for a year)
• Better rate than the 0.05% I could get with my bank
• Low hassle.

I have added the last as I know there are ways to get goodish rates on a current account which requires money to be transferred between the account/DD set up. If it can be done with just a standing order moving between accounts I can live with that, however don't want to get in involved with having to move DD's etc.

We are both under 40 so LISA is open to us, also the wife has never had a house before so I assume will be classed as a FTB, where as I won't, is there anyway to leverage this? Or is the time frame (6 months) not eligible for these yearly bonuses etc.

TIA

ColdIron

LISA aside, £40K is easily covered by the FSCS so just about any easy access savings account would fit your bill. How about a Tesco Internet Saver at 1.2%? Simple to open and easy to operate

xylophone

You might open a Nationwide Flexdirect each and a joint which would give you 5% on a total of £7,500.

You would have access to the Flexclusive monthly saver.

You might do the same with TSB Plus, which would give you 3% on a total of £4,500.



Otherwise

http://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

george4064

Lots of options to stick your money away here: http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

The safest option would be to stick it all into NS&I which is guaranteed by the government, but you can get better returns elsewhere if you put a bit more effort in.

eskbanker

zharrt wrote: »

We are both under 40 so LISA is open to us, also the wife has never had a house before so I assume will be classed as a FTB, where as I won't, is there anyway to leverage this? Or is the time frame (6 months) not eligible for these yearly bonuses etc.

A LISA has to be open for at least a year before funds can be withdrawn without penalty, so is unsuitable for a six-month window....

hutman

on this topic.. i have been intending to get on the property ladder for a while since the beginning of 2016 in fact. However, for various reasons i have not taken action. in that time my deposit has increased but house prices havent come anywhere near down enough for me to get on the 'ideal home'.

would it be better for me to stick 10k (remaining isa allowance) of that deposit into a vls fund?

eskbanker

hutman wrote: »

on this topic.. i have been intending to get on the property ladder for a while since the beginning of 2016 in fact. However, for various reasons i have not taken action. in that time my deposit has increased but house prices havent come anywhere near down enough for me to get on the 'ideal home'.

would it be better for me to stick 10k (remaining isa allowance) of that deposit into a vls fund?

Not sure it's a sensible strategy to be waiting for property prices to come down to a level you've got in mind, but maybe local conditions where you are warrant this. Living in a hut doesn't sound very tempting though....

In general it's not a good idea to invest money you might be needing within a few years so only do so if you're prepared for the possibility that it could lose a significant amount of value by the time you need it - you would be an unusual first-time buyer if you were in that situation though! Are you making the most use of HTB ISA and/or LISA?

hutman

waiting for the bubble to burst in London

havent looked into LISA in detail but HTB ISA wasnt very appealing based on the wait/qualifying period.

eskbanker

hutman wrote: »

havent looked into LISA in detail but HTB ISA wasnt very appealing based on the wait/qualifying period.

Not sure what you mean - there's no wait or qualifying period with a HTB ISA (other than the minimum bonus being £400, achievable within a couple of months)? There is with a LISA though, in that you need to run it for a year, but you can pay more into it than into a HTB. Many first-time buyers are delighted to have access to a 25% bonus from the government....

hutman

theres too much conditionality attached to both schemes such as the maximum price of a house and the penalties that ensue for withdrawal. in addition making monthly contributions, waiting for a year to see the return etc is just sounds like a night mare

eskbanker

hutman wrote: »

theres too much conditionality attached to both schemes such as the maximum price of a house and the penalties that ensue for withdrawal. in addition making monthly contributions, waiting for a year to see the return etc is just sounds like a night mare

Well nobody's forcing you to take advantage of the free government money, but what's your better idea?

Investing your money in equity-based products might work out if the markets keep rising during your timescales but, to borrow a well-known (but often misquoted) film quote, "you've gotta ask yourself one question: "Do I feel lucky?" Well, do ya, punk?"