Buy a house or invest or Lifetime ISA?

dreamvendour

Hi everyone,
I've just asked a similar question here but realised I didn't phrase it properly... 
My husband and I live with his mum and we're in a very good position in the way that we like living here and are not planning on moving out to our own property. However, we do have about 900 pounds every month jointly that we can put towards some kind of an investment. Originally we wanted to go for a BTL because it would mean that the rent would be partially covered and we'll have a house in say 15-20 years when we eventually have to move out. The current house the mum owns will be split into three parts when she passes and whatever is left will be enough for a deposit but not for the whole house. However, I got comments saying BTL is not a very good option for an investment. I'd really like to ensure a good future for us with this spare money we've got to invest into something. Also my husband has owned a property but I haven't, so I'm wondering whether I should go for a lifetime ISA instead (put 4000 in every year) and just buy a house when we eventually need one and invest the rest into stocks?
Will appreciate any info on this. 
Cheers!

masonic

If your timeframe for buying property is in 15-20 years time, then you could invest in a S&S LISA, moving to low risk assets or cash in the years leading up to you buying.

El_Torro

Do you really want to live with your husband's mother for 15 years or more? 

Either way I don't think that buying a BTL with the plan to move into it at some point is the way to go. Better to save up for a deposit (with some of the money going into a LISA) and move out when you can. 

If you really are planning to move out in 10 years or more then investments (either a S&S ISA or a S&S LISA) are a good idea as over that long a timeframe the investments should perform a lot better than cash. If you're looking at a shorter timeframe then cash would be a safer bet. Otherwise you might find that when you are ready to put a deposit down the investments have dropped and you have actually lost money when compared to cash.

steampowered

Have you considered a pension?

If you are employed, boosting pension contributions could be a good idea. You benefit from tax relief (no income tax) and no national insurance on the pension contributions. Compare that with BTL, where you are looking at having to pay income tax on the rent. Much less hassle than BTL.

There is an MSE article about the differences between Lifetime ISAs and pensions which you should read.

You will not own the house in 15-20 years if you take out an interest only mortgage.

Albermarle

You asked on the other thread about any info on investing . Have a look here 
https://www.moneysavingexpert.com/savings/investment-beginners/
https://monevator.com/investing-for-beginners-why-do-we-invest/

Eco_Miser

Your plans are dependent on your mother in law surviving for the next 15-20 years.  While I hope that she does, what will happen if she doesn't? In particular if her demise coincides with a downturn in your investments?

ElephantBoy57

Eco_Miser said:

Your plans are dependent on your mother in law surviving for the next 15-20 years.  While I hope that she does, what will happen if she doesn't? In particular if her demise coincides with a downturn in your investments?

If the OP is 50+ is an option to invest the money in a SIPP pension and get the 20% tax relief?

When the OP is ready they can cash in the SIPP in order to get a mortgage. The money in the SIPP could be invested in unit trusts or shares.

masonic

ElephantBoy57 said:

Eco_Miser said:

Your plans are dependent on your mother in law surviving for the next 15-20 years.  While I hope that she does, what will happen if she doesn't? In particular if her demise coincides with a downturn in your investments?

If the OP is 50+ is an option to invest the money in a SIPP pension and get the 20% tax relief?

When the OP is ready they can cash in the SIPP in order to get a mortgage. The money in the SIPP could be invested in unit trusts or shares.

If the OP is 50+ than that's at least 10 years too old to open a LISA.

ElephantBoy57

masonic said:

If the OP is 50+ than that's at least 10 years too old to open a LISA.

I suggested that the OP should make use of a SIPP, I am 59 and opened one last week.

masonic

ElephantBoy57 said:

masonic said:

If the OP is 50+ than that's at least 10 years too old to open a LISA.

I suggested that the OP should make use of a SIPP, I am 59 and opened one last week.

The OP is looking to open a LISA. Unless they have a serious misunderstanding of the eligibility criteria, it is safe to assume they are under the age of 40. Someone in their 20s or 30s should not use a SIPP to save for a house.

ElephantBoy57

masonic said:

The OP is looking to open a LISA. Unless they have a serious misunderstanding of the eligibility criteria, it is safe to assume they are under the age of 40. Someone in their 20s or 30s should not use a SIPP to save for a house.

dreamvendour is looking to buy a house in "say 15-20 years", perhaps when their mother passes away.

I take from that, that they are not a young couple.

I will be using some money from my SIPP to perhaps pay off my mortgage of purchase a vehicle.