Buy to Let or Stocks & Shares ISA in 2024

tuck60

Just after some general advice in 2024 as to whether people would lean towards a BTL or Stocks and Shares ISA to try and grow thier savings pot? My partner and I have around 30k in a basic savings account and want to try and accelerate this over the next 3-5 years. Thanks

Albermarle

This is a savings & investments site so you will find most replies favouring the S&S route.
Especially as in the last few years the tax regime and rules surrounding BTL have tightened considerably. 

The main point with S&S is that the investing is safer when the time scale is long term. So where you would not need the money for quite a few years. If you might need the money sooner it is probably best left in a savings account.

wmb194

tuck60 said:

Just after some general advice in 2024 as to whether people would lean towards a BTL or Stocks and Shares ISA to try and grow thier savings pot? My partner and I have around 30k in a basic savings account and want to try and accelerate this over the next 3-5 years. Thanks

Why only three to five years? Seems like a short timeframe.

p00hsticks

Where were you thinking of purchasing the BTL ?
By the time you factor in buying costs, selling costs, SDLT, mortage costs, managing costs, risk of tenants trashing the place, cost of void periods etc, I can't see you getting much of a return over the sort of timescale you're looking at - but some people on the housing board might have a more positive view (although from previous similar threads, I think most take the view of Albermarle that legislation increasingly discourages landlords) . 

eskbanker

tuck60 said:

Just after some general advice in 2024 as to whether people would lean towards a BTL or Stocks and Shares ISA to try and grow thier savings pot? My partner and I have around 30k in a basic savings account and want to try and accelerate this over the next 3-5 years. Thanks

What happens in 3-5 years time, i.e. how likely is it that the money will be needed then and does this coincide with buying property, or retiring, for example?

Beddie

BTL is dead - do not go anywhere near it. Many landlords are selling up due to the onerous taxation and regulations.

If you really only have 3-5 years, stick to saving accounts. Or maybe invest some, say £10k and see how it goes.

Roger175

We became accidental landlords about 5 years ago and did very well out of it for a few years, but due to a variety of reasons it became obvious that the tide was turning. We sold our property exactly a year ago and have not once regretted the decision. Increased borrowing costs combined with reasonably good saving rates, means we are now earning more on our money by simply having it on deposit, than we were from the BTL (after tax etc). We are limited to how much of the released capital we can get into pensions (due to minimal net relevant earnings, since I am in the process of winding down to early retirement) and we can only get £40k/year into ISAs (2 x £20k), but even with these restrictions we are very glad we got out of BTL.

Furthermore and equally important, we now have no stress and next to no risk. 

I would strongly advise against BTL.

njkmr

After 20+ years of BTL I sold up this year.
I do not know how I did it for so long, as the pressure that lifted when I sold them was immense.
No more dealing with tenants, multiple mortgages, lazy letting agents, and a raft of regulations etc.
Happy days.
Paid off my residential mortgage and am now mortgage free, with the rest of my money now invested and extra going into pensions .
It is not an easy money maker letting property as some people think .

george4064

Binary question: Stocks & Shares

michael1234

Its an old thread but I suspect some of the advice applies even more now then it did a couple of years ago.

Still, playing devil's advocate. If I used 150k (including assumed 5-6% ish discount to purchase plus 2nd home stamp duty and sol's fees making the total 150k) to buy this "beautiful" flat and rented it out for 1.1k that would give me a gross yield of close to 9%. Tax would depend on when and how I took the cash but given we all have a tax-free allowance of around 12k and my pension will become available this year (giving me the option to move some gross proffit directly into that without paying any corp tax) its all how long is a piece of string as it depends on circumstances at the time you extract the funds but I'm thinking I could keep tax below about 19% overall (personal+corporate).

https://www.rightmove.co.uk/properties/174015407#/?channel=RES_BUY

So, if you enjoy reading all the rules most people find dull, what's not to like about buy 2 let in 2026? Granted, you can't take a huge deposit upfront, pay it into your personal bank account and not repay it at the end of the tenancy. You can't put tenants into a place with a dangerous boiler or electrics. You can't kick them out just because you feel like it - you need a reason. And lots of other stuff like that. What else is not to like? 9% gross (which a myriad of ways to lower tax) vs (say) 3.75% in a bank account. That's some difference.

P.S. I did actually view that flat - I've until tomorrow to put in an offer.

masonic

If you feel like being a landlord with all the associated responsibilities is something you would enjoy then why not. Obviously there will be costs that come from that 9% gross, so what you end up with net may be a few percent less than that, and of course a small risk of a much worse outcome. It would be comparable to the return you might get from a medium risk investment, albeit with more work, which is what puts many off. The timing is good, with many landlords exiting. There is still a need for good landlords so if this is your calling, then perhaps you should make an offer.