Ouch indeed!Originally Posted by wileeeeeey
And a brave attempt, thank you, to keep the thread on track!
If you've not already used your quota, than I'd take it as a sign that you have £50k to spend and the Premium Bond limit is £50k....
The return is reasonable by todays standard (keep an eye on it if savings rates rise), it's easy to access your money when needed, it's safe and you have the thrill of checking the app to see if you've won each month.
Would a 7% return over 5 (or 10 or 20) years interest you? Or, are you expecting more?
many thanks for all the replies, much food for thought!
I don't want to leave right now (as the job is pretty good and not too hard), but I thought 3 years time would be good. I would not need 3k a month to live on, probably half that would see me ok.. I'm quite happy with my current car, think I will hang onto it for a few years yet and then go electric.. I have no other expensive hobbies apart from watches and road bicycles and I'm happy with what I have got in both of these interests..
Must admit though a nice holiday in the sun when all the covid calms down a bit is v appealing :)
One of the core tenets of both hobbies is N+1, I'd suggest you invest in a Moots/Parlee and a Dornbluth on retirement. 😃
ISA allowance- £20k now and £20k after April. Tax free growth and access whenever you want it back?
With respect Qatar and Warwick aren't great bases to be in a position to judge. The '5' times figure may be correct, but there are schemes to help yound people/first time buyers that make it a lot easier than that. My nephew just took advantage of one.
The assertion that people rent, primarily because they can't afford to buy, is plain wrong! I rent out around 60 properties and I would say that the vast majority of tenants, renting is a choice rather than some kind of last resort. Most tenants come into one of the following categories...
- Couples setting up home who want to give things a try before committing to a financially binding situation.
- Recently separated spouses looking for a temporary base to give space to get back on their feet.
- Retired folk who've cashed up their houses and living off the capital
- People on temporary work contracts in the area.
- Newcomers to the area who want to get their bearings before commiting to buying somewhere.
None of these people want to be home owners. Of course ther are some (I'd estimate around 10%) who are renting because they can't afford to buy, but that's life isn't it?
Where do you think they would go without 'parasitic' landlords? The fact that you even use such a term tells me everything I need to know.
With the £2,000pa dividend allowance and £12,500 (?) CGT one, most people never get close to needing the tax benefits of an ISA. Worth considering if there is a fee for holding investments in the ISA.
If you’re comfortable sharing are these in/around the area where you live or elsewhere? Can’t see even 10% of that being possible in london these days but further out yes, depending on where.
All but one of your examples are short term but the reality is that most tenants are in long-term rental situations which would imply they are there because they cant afford to rent OR they consider their capital better allocated to other investments. Right now there is a case that renting and investing in equities is better than owning ...
Jdh1, if my use of parasite offends, then I apologise.
But your 10% figure doesn't ring true - literally the first result on Google for "why do people rent" is this -
From here - https://www.propertyreporter.co.uk/l...ad-of-buy.htmlAs you would expect, affordability is a major factor. And indeed, most respondents said they were renting because they simply didn’t have the means to buy their own property. According to the numbers, 56.30% said that couldn’t afford a deposit and 29% said that they were unable to qualify for a mortgage.
By saying that my perspective from Warwick is skewed, you again suggest that there is something about Yorkshire that makes people happier to rent, and yet you've offered no proof of this. Your only evidence is your own experience, and while we'd all like to extrapolate anecdotes into data, that's just poor reasoning.
In your first post, #32, you say
I'm not suggesting "everyone" - that's a straw man argument. I'm suggesting that you're wildly out with your 10%. I've provided a link to a survey that shows more than half of those surveyed are renting because they can't afford to buy. Do you have any evidence, beyond a gut feeling, to support your position?There is often an underlying assumption that everyone would rather buy than rent. That simply isn't the case.
And "but that's life isn't it? - should it be? Or should we be part of the solution, rather than being part of the problem?
There is another possibility with long term tenants - that they don't want the lhassle and commitment which property ownership involves. Renting is easy. No stamp duty to pay, no mortgage to arrange, and if anything goes wrong with the property its someone else's problem. If they fancy a change or don't like the neighbours (or neighbourhood) they can move on without ceremony at a month's notice. That appeals to a lot of people. To many. the financial picture is secondary.
I was talkink specifically about Yorkshire, because that was the context of the discussion. I do have property in London as well, but as you say, a seperate market.
To answer the OPs original question, why not put the 50K into a reasonably safe High Yield Bond fund such as Legal & General High Income Trust. This currently pays around 4.5% and is far less volatile than equity income funds.
Income is the name of the game in retirement, closely followed by absence of stress. Invest the £50k like this, let it compound for 3 years, then switch to income units and you should be looking at over £200/month income to supplement your pension. Put the £50K in now and ISA £20k of it in each of the next 3 years (very easy to do).
Not a straw man arguement at all. You said:
As you'll see you are countering my claim that SOME people would rather rent than buy by saying those people are forced to rent.I suggest that the demand for rental property is driven by the lack of affordable houses available to purchase. You suggest that some people would rather rent than buy. I suggest that those people are forced to rent (thereby increasing the demand for rental properties) by the price of property, and that the price of property is driven up by parasitic landlords who make money from the labour of others. I think that's a reasonable supply/demand situation.
You know when you worked in Qatar? Did you buy a property or did you rent it from a parasite landlord? Or maybe you stayed in a hotel run by parasites exploiting your need for shelter.
The straw man, I think, was in your post #32, when you mention this underlying assumption that everyone would rather rent. I accept that you're right - it's a bad assumption, and not, I don't think, one I made You're right! Not everyone would rather buy, and you give some good examples of who might prefer to rent. But I took issue with your figure that 90% of your renters can afford to buy when the study I quoted suggests that less than 50% are in that enviable position.
Nope, my accommodation was built by my employers and provided as part of the package for employees such as myself.
I'm not going to change your mind, and nor will you change mine, so have a lovely Tuesday! Be good to your tennants, please - studdies suggest that half of them are in your properties because they can't afford to buy.
All the people that have rented close to where I live have done so for the following reasons -
Checking out the area first and having the advantage of no chain while searching for the right house.
Moved into the area to take advantage of the schools, they often stay rented for a few years and then buy their own property.
I have not talked with anyone yet who has said they cannot afford to buy, most rent for the convenience and see renting as a service they can take advantage of, I imagine the reasons for renting change between areas so there is no definitive answer of why people rent..
At the risk of being rightly (!) accused of point scoring I'm not sure there's much space on the moral high ground for anyone directly or indirectly profiting from the Qatar coin!
You're right that more than 10% of our tenants can't afford to buy, but not being able to afford to - and WANTING to - are not the same thing. I can't afford a period country mansion, but I don't want one because it would bring with it, lots of obligations, commitments and hassles, which I don't want. The reason I choose to live somewhere else isn't because I can't afford it. Similarly some of our tenants aren't in a position to purchase a property at the moment, but wouldn't do so even if they were, for reasons previously indicated.
Apologies if I appear very defensive, but the things you're saying would only ever be said by someone who has no experience of tenants or renting property. If you'd seen and experienced 10% of what I have, you would never use the words 'parasite landlords' again.
Last edited by Jdh1; 11th January 2022 at 15:13. Reason: typo
The clientele on this forum isn’t exactly council estates.
Let’s be real, if you live in a nice area and people around you rent temporarily they may well fit into the categories already listed of try before you buy.
I live in sheffield. Average house price 150k if you would like to live in a catchment of a top school in the city you’re looking at about 300grand for a terrace.
So just double the average.
Jdh As you mention the 10% of what I’ve seen comment. You know the game well. Buy some properties in craphole parts of town. You might get good tenants you might not. But that’s why the yield is so much higher.
This is exactly what I came on to say -- I have a very small portfolio, and ease of mobility is the biggest reason for people renting from me
I live in a hive of engineering firms in a 30 mile radius and a lot of workers go where the best wages are, so they don't want tied to a property
There is absolutely no need for that beach shot!
Gratuitous beach shot from last week - live the dream!!
Is that a 'no', then?
(And don't worry, it's not some sort of Ponzi scheme. It's just not entirely mainstream. Yet.)
The BTL always gets people divided . For me there is a middle ground.
I have several but i consider myself a good landlord.
I don't overcharge tenants , i look after the properties and don't use letting agents .
Using the above I've almost become a stepping stone for young couples in my area to spend a bit of time together before taking the plunge into buying.
Sure i could make more but the above means I'm happy with the income and so far the tenants are also.
I have 3 children and the end game is to help them so this is just part of the journey as we see it.
sorry - yes that sounds good if it's not too risky..
Just wanting a safe place to invest so it is not eaten away too much by inflation really..
It might sound strange to be investing your money in a League 1 football team but this is totally legit:
https://ploughlanebond.com/
They raised over £5m in their first round of investment a couple of years ago. They are looking to raise £2.5m this time around. You can choose your level of return (up to 7%) and you can choose a 5, 10 or 20 year term. You get your interest paid annually and receive your full investment back at the end of your chosen term.
6% max for new customers. There's risk to consider.
https://ploughlanebond.com/legals/bond-risk-factors/
Loss of Capital
If the financial performance of the club deteriorates it is significantly more likely that there will not be sufficient funds available to repay the principal of your bond or to make interest payments. You should not invest more money than you can afford to lose without altering your standard of living.
Of course, there is risk to consider. I think that any financial investment comes with the caveat ‘the value of your investment might go down as well as up’ etc etc. But in this environment of near 0% base rates, I consider it to be a relatively low level of risk for a 6% return over 5 years.
(Thank you for the correction on the available %. I was obviously taking the headline figure).
Haven’t read the details but if this is a straightforward bond then there is no upside. Best case is you get your money back. The fact that they are offering 6% in times of generally very low interest rates gives a clue about the risk (which is to your capital and future interest payments).
I don’t know anything about peer to peer lending but I believe you have the opportunity to diversify so not be reliant on one borrower.
Not sure what the current yield is on, say, the FTSE100 or the FTSE250 but you could probably get 3 to 4%pa yield and have the prospect of gains (as well as losses, of course).
That said, I really do hope that Wimbledon succeed in rebuilding their club.
Last edited by David_D; 13th January 2022 at 12:04.
The ‘upside’ is that you receive 6%pa on your investment. In the OP’s case, if he invested his entire £50k, that is £3kpa so £15k over the term. Then he gets his £50k back at the end of 5 years.
That is considerably better than any bank can offer right now and probably less risk (and considerably less hassle) than a BTL property.
The 6% offer isn’t necessarily a reflection of the level of risk. It is because that is cheaper than current commercial lending opportunities available to AFC Wimbledon.
Last edited by Bravo73; 13th January 2022 at 13:10.
I read this as saying banks won’t lend on terms that they are offering. Banks are often wrong, but ….
“Ideally the club would like to remove any need for external commercial debt by April 2022. The more money that is invested in the Bond scheme, the better the club's overall borrowing terms will be. “
I admire your confidence.
If you put £50,000 in the bank, you get £50,000 back - guaranteed.
It’s absolutely a reflection of the risk. Probably not sufficient to reflect the actual risk which is why they appear to be using the money raised to pay off (more expensive) bank debt.
Yes. But without an extra £15k of interest.
Don't forget to factor in inflation. You may still have £50k, but the buying power will be considerably less, effectively loosing money.
Ive gone with Artemis income for part of my lump sum investment - has a decent long term track record but like all investments you need to do your research
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Just completed on the purchase of a lockup garage today actually. As you say there are lots of the benefits of property without the downsides of stamp duty and the endless rules governing residential rental property. This one is at the other end of my road (NE London) so when it’s not rented I can use it for storing my own junk! A few garage blocks round here have been redeveloped for housing so maybe there will be a developer after it one day too.
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Dividends and capital gains enjoy preferential tax treatment. The annual interest allowance is only £1,000 (£500 for higher rate tax payers).
Subject to other investments, £50,000 in equities would probably give you income falling within the £2,000 dividend allowance.
Obviously, it’s a personal choice but I wouldn’t invest in unquoted debt for a 6% yield.
Indeed but the capital is secure unlike the Wimbledon offering.
I think the OP needs to define his investment horizon.
If it’s less than 5 years I’d suggest some sort of fixed interest account.
Given the volatility of markets I’d not invest with a short term outlook.
Superb…
Hope you got a good deal and if you ever want to let it go…DM me!
Nice, I’m in the same area but no garage here. Was this advertised through an agent or did you find it a different way?
I spotted it on Rightmove, for sale though a normal agent. Ours is in South Woodford but I also spotted another one for sale in Wanstead at the moment too though that one is only leasehold.
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Decent area, I’m not too far away and wouldn’t mind a garage for a motorbike. Will have a look on RM/Z and see if anything pops up. Thanks
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