This does not constitute advice or any recommendation at this time, as we will need to look at your position in more detail.




Property has always been perceived to be a good investment and it is in the English syche as the investment of choice, BTL property has always been viewed as someone else paying the mortgage and of course with  25% deposit needed to purchase a BTL property we could probably do something at 20% you are gearing up capital gains.


BTL property has been positive for capital gains over the past 20 years, the chart below shows a £100k property would be worth about £325k now, but interestingly an fund investment would/could be worth around £380k now. This is totally dependent on when you enter and exit the market but it shows that sometimes shares can grow more that property and vice versa depending on sentiments and taxation, with the additional taxation issues surrounding property today you do need to be considering Fund Investment using ISA wrappers also.













We all know people that have done well in Property, however the taxation and political views around property has changed in recent years and therefore needs to be considered in the overall strategy versus other options that are available.


For example any BTL/Second Property purchased today, there is now a 3% Stamp Duty charge upon purchasing (EG a BTL Property of £200,000 there is a £7,500 SDLT bill at outset) also any income generated will be taxed at your personal tax band which as a higher rate tax payer this is 40%. With the phasing out of mortgage interest relief suddenly the monthly income you generate is not as exciting once you have paid the mortgage and taxes, top it off with a nice 28% CGT tax liability as you are a higher rate tax payer on any Capital gains over £12,000 (Current CGT threshold) when you sell the property this is not the best investment available but granted some love it.



In my view, the low fees, attractive yields and potential tax advantages of a good equity income funds make a better choice to a buy-to-let property for most individuals at this time. Really property should usually form just a small part of a well-diversified portfolio.


So what is the next stage….


So what should you look to do with cash as you do need to invest it in somewhere as inflation will reduce the value of this every year, property is looking pretty expensive to get into and out of at the moment and with interest rate rises on the cards there is pressure in this sector, (unless a cracking deal comes about) but we can offset some of the costs using company structures (eg.SPV).


As an alternative/additional strategy we have an excellent Investment platform proposition, you can invest on a regular basis or once a year, you can move funds around to ensure you are using your tax free allowances, we don't stock pick but utilise a combination of asset classes such as property, gilts, bonds, UK and global equities using funds and fund of funds plus amongst others, this means you can ensure you are well diversified and also you wont have the hassle of having to arrange for repairs etc on a BTL property.


This is a very quick overview and the next stage would be to put a more detailed financial plan together, utilising all the options available, we can also tailor fund choices to your Risk profile, goals and investment horizon.


This does take time and we charge £850.00 to complete the whole process and put forward the recommendations around a detailed plan based around your goals and our expertise surrounding taxation, estate planning, investment and pension planning and of course this is not a one off thing as it is reviewed annually.


I think it would be worthwhile as we can set up different ISA’s and strategies on the platform and also look at BTL property as part of your investment portfolio as a whole rather than just as an either or, let me know if you would like to do this and we can put a date in the Diary to meet up.


I look forward to hearing from you.


Best Wishes