House sale lump sum - how best to invest temporarily and how to help

MaggieTaylor

Hi all - my daughter is selling her house, sadly following a relationship breakdown.  She has moved in with us (parents) and once the house is sold we need to find the best place to invest her proceeds for around a year, before she is ready to buy on her own.  She also needs our help to buy next time - should we transfer ££ from our ISA to her now to invest with the other proceeds so she can show 'ownership' of the money when it comes to applying for a mortgage next year or should we hold on to it until she has found somewhere to buy (several of our ISAs are maturing this year and it could make sense pass them to her on maturity)?

eskbanker

A year is too short a period over which to invest, so she needs to be looking at savings accounts instead - if she's confident that it'll be at least a year then a one-year fixed term account will probably suit, although she may need multiple accounts if the proceeds exceed £85K (perhaps unlikely if she's needing further parental assistance)

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

In terms of your other question about giving her money, lenders will often require documentation of such gifts used to contribute to deposits but I don't know if there's a maximum time between gift and purchase for that to be necessary and it could potentially vary by lender.  If you're going to do it anyway then doing it sooner rather than later would seem sensible....

Albermarle

You should not invest the money for such a short period . It will just have to go into a safe savings account .

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Large sum short term investment — MoneySavingExpert Forum

tacpot12

Your daughter should not invest the sale proceeds. Investment generally implies a risk to the capital. She needs to save the money in a savings account. I'd suggest Aldermore Double Access Account as potentially suitable.

If the proceeds are more than £85,000 she needs to consider that this is the amount of the Financial Services Compensation Scheme will protect within a single institution. If the proceeds are more than this amount, she might want to split the amount across more than one institution. 

I don't know whether giving her your money early will make any difference. I doubt it, but again if you don't want to lose money, then putting your maturing ISAs into easy access saving account would make sense. 

soulsaver

I don't think it will make any difference when BoM&D contribute; the conveyancer will ask her to show how the funds were accumulated and, assuming the sum is a significant portion, she'll have to show it came from mum, whether it's a year ago or yesterday.

badger09

tacpot12 said:

Your daughter should not invest the sale proceeds. Investment generally implies a risk to the capital. She needs to save the money in a savings account. I'd suggest Aldermore Double Access Account as potentially suitable.

If the proceeds are more than £85,000 she needs to consider that this is the amount of the Financial Services Compensation Scheme will protect within a single institution. If the proceeds are more than this amount, she might want to split the amount across more than one institution. 

I don't know whether giving her your money early will make any difference. I doubt it, but again if you don't want to lose money, then putting your maturing ISAs into easy access saving account would make sense. 

Although FSCS cover house sale proceeds (up to £1million😏) for 6 months. 

So Shawbrook 6 month fix (if still available when sale goes through) or similar might be an option. Then split over several accounts if necessary.