I need a bit of advice please

ryry91

Hi guys,
Both myself and my partner are first time buyers and in all honesty have very little knowledge of buying property. I have been talking about it a lot recently as our joint savings are stacking up quite nicely in help to buy ISAs (at 4% interest) and I am managing to pay off a lot of my debts so we are estimating that we will be able to start the process of buying in the next 18-24 months.

So I can better understand the process of buying a house, I have been talking to a lot of my friends some of whom are a lot older than me and have had property for a long time. One of them told us to bin off the help to buy ISA and instead invest our money in a buy to let property whilst we finish university degrees etc. But I am totally new to this situation, so I thought the best people to ask would be on here as you guys all seem very clued up.

So my main question is I suppose, are help to buy ISAs worth it or is there a better way to be using/storing our savings?

HampshireH

Your better spreading your savings. If you use the savings board you will find some really helpful advice.

You can only put a small amount in H2B isa. A maximum of £200 a month.

Mutton_Geoff

ryry91 wrote: »

One of them told us to bin off the help to buy ISA and instead invest our money in a buy to let property whilst we finish university degrees etc

Probably the worst advice you will have ever received. Best ignored.

ryry91

I will be honest, as much as I do not know a lot about these things, I did think it wasn't for me but it is always best to get these things verified

KiKi

Think about it logically: you're not in a position to buy your own house, yet, but someone is suggesting that you buy a house anyway. That, in itself, is madness if you can't afford a property in the first place!

Secondly, buy to let interest rates are typically higher, and typically require a far higher deposit. So if you can't afford your own house, you can't start a business buying houses.

Thirdly, letting a house out to someone is running a business. You become a landlord, with all its legal responsibilities, and will have to manage your accounts to pay tax on that business. What happens when a tenant doesn't pay you rent, and you can't get them out of the house for 6 months? How will you pay the mortgage if they're not paying you rent? What happens if they trash the place?

Finally, investments are (typically) long term - certainly when buying houses. You are talking about purchasing your own place in two years - that's not long enough to invest in anything sensible and make an great return on it unless you're prepared to take some significant risks. Given that you, in your own words, know very little about this stuff, it would be madness to even consider this. Keep away from investments unless you really know what you're doing. Stick to savings for the timescales you're talking about.

Look up the bank accounts and savings accounts that are the highest paying (including regular savers) and split your money there for now.

[Deleted User]

Your friends advice is not good. You can't usually get a buy to let mortgage unless you have an initial property you live in. These mortgages require a higher deposit level.

And to be honest, it doesn't really sound like your property knowledge level would be up to being a LL at the moment.

Would be better to follow advice in previous reply. I'm not sure BTL's are as good an investment as they were anyway.

juniordoc

A help to buy ISA is a really good place to put your savings as you'll get the bonus too meaning it's difficult for any other investment to beat.
As others have said the downside is you can only put in 200 a month meaning you need to find other places to save your money too to get any meaningful deposit.
High interest current accounts earning 3-5% interest would be a good place to start.