Gilts or buy to let

jimjames

Those 3 options are all very different points on a scale of risk, effort needed and liquidity. It would be the equivalent of looking for transport and having your choice between walking, buying a bike or a Ferrari.

Gilts have the return guaranteed, free of CGT as you've pointed out. BTL has neither and isn't liquid or short term when you include the costs of purchase/sale as well as difficulty in getting tenants out if you want to sell up.

born_again

Neighbour up street take on this would be 90K is enough to have more holidays than time at home. Which is exactly what he does.

His take is enjoy life while you can. Currently spending 6 weeks in Africa. Will be back for a couple of weeks & then off somewhere else.

poseidon1

As your current rental properties are mortgage free, are you aware that as a higher tax payer you would not get full 40%/42% tax relief on future mortgage interest payments, only lower rate relief thereby impacting on your net rental profits after tax.

Once you do the all the sums, you could find uncertain future capital appreciation is the only justification for BTL, unless you unwisely decide to use a limited company for a future purchase.

itsme999

Which guilt offers 1-2 years low coupon worthwhile yield today?

redux

I don't think these are the only options. Maybe a bit in between or.as.well I'd also be looking at funds or investment trusts in corporate bonds and similar yields, range 6 to 9 per cent. If connection with property tempts you, also include real estate investment trusts in research.

Some speciality sectors might need a bit more thought, or just turn away. For instance wind or solar investment trusts might have been tempting at times, but aren't straightforward and some have been more volatile in value and shown gradual fall in recent years. Mixture of effects of tariffs, gearing with interest rate changes on borrowing, some site sales, and investment trust discounts.

And these funds or trusts could be tax sheltered in pension as already suggested, or ISA, and held for several years. If it turns out we're at a high point of interest rates, there could be gradual slight capital appreciation when rates fall again. Or rates go a bit higher, slight capital fall. Similar effect to gilts in other words. So decisions might depend on whether you want to count a plan as for 2 or 3 years or 10 to 20

BreakingGlass

https://forums.moneysavingexpert.com/discussion/comment/82167362#Comment_82167362

Out of interest I just checked and apparently from April 2027 mortgage interest tax relief will be at the new 'Property Basic Rate' of 22%.

And I agree about uncertain capital appreciation being the only justification - gone are the days when we could pretty much take this for granted.

itsme999

I should have said if I go for BTL, the mortgage will be for short term; max 12 months as have fixed term bonds maturing and will pay of the mortgage. I haven't done any research of current BTL mortgages and if lenders let me pay off the mortgage after 12 months and w/o penalties.

Linton

https://forums.moneysavingexpert.com/discussion/comment/82167429#Comment_82167429

See https://www.hl.co.uk/shares/corporate-bonds-gilts/bond-prices/uk-gilts and sort by maturity.

itsme999

https://forums.moneysavingexpert.com/discussion/comment/82167485#Comment_82167485

I have been buying gilts from HL but wasn't sure if they sell all available UK Gilts.

It's between TG29, TN28 and TR29. I am already holding 2 of them.

There is a property I am going to view next week then decide what to do.

35har1old

https://forums.moneysavingexpert.com/discussion/comment/82167545#Comment_82167545

Whats the stamp duty on £25000?