Should I sell or take a Lifetime BTL mortgage ?

Reply to the comment left by Queen Victoria at 04/08/2019 - 20:10
Apparently, that’s a strategy that Warren Buffet recommends. I think it’s fair to say he knows a fair bit about investing!

Reply to the comment left by Queen Victoria at 03/08/2019 - 23:26
Lots of poor people dabbled in shares! High risk of losing capital v guaranteed income and appreciating asset? Unless you want sleepless nights (my experience) stay with the safe option!

Reply to the comment left by Joanne Andrew at 06/08/2019 - 18:49
The only way you lose capital in the stock market is if you sell when the prices are down. The Warren Buffet way is best; buy, buy the whole market not individual shares, keep buying regularly and then just leave them alone. Over the long term the price rises (it always has and probably always will) despite the ups and downs in between. If you are saving up for your old age it works a treat. But, as you say Joanne if it gives you sleepless nights then don't do it. Having some rental property and some stocks in a pension has served me well over the past 20 years as I have been trying to accumulate but as I edge into my 60's and enter the decumulation phase (which is where the questioner is I think) the property option becomes less attractive as the hands-off stock option much more palletable.

Reply to the comment left by Queen Victoria at 06/08/2019 - 19:26
Property can be hands off if you get a good agent, so I wouldn't write it off completely.

I am in a slightly similar position to this lady and I would suggest she waits for the London market to pick up and sell immediately. Boris Johnson wants to be a long term prime minister and I think the new government will see sense and reduce stamp duty especially for those of us with property in London. They may even reform CGT given that it has become even more draconian since all index linking was removed. My London house is in the same price bracket as this lady's and although I had rented it out while living abroad I have not rented it out since the last tenants moved out last August as they left it in a very saleable condition. I have appropriate non-occupied insurance cover and comply with the special conditions attach to the letter. Having checked the article on the lifetime mortgage mentioned I would stay well clear of that. It seems to be a variant of equity release which should be avoided at all costs. .

Reply to the comment left by bob young at 10/08/2019 - 14:46
Interesting perspective.

What if London property prices fall even further?

What if Boris’ decides to make sellers pay Stamp Duty?

Why do you think equity release should be avoided at all costs?

Just asking because I am genuinely interested to listen to well thought out arguments for all of the points you have raised.

Some useful stuff here, well argued. As an Accountant and IFA, who has also been a part time landlord, I would add the following :
1. Liquidity : you can't just sell the kitchen if you need, say, £10,000 for a new roof, and the public are the last to know when a property crash is approaching; 2. in Stock Market crashes, you rarely lose all your money if you have invested in pooled funds ( EG. unit trusts, OEICs, IT's ) 3. what rate of Interest is charged by the Eq Rel provider - how long before your capital is used up ? 4. Risk on Stock market investments can indeed be reduced by diversification ( Vanguard are indeed very good, very big and very cheap ) 5. Investment Bonds allow a 5% tax free withdrawal every year, with the tax payable being deferred for 20 years; they can also be low risk as well if that is preferred. 6. Yields on BtL property in the North are far higher than in the South, especially London - someone already mentioned this. 7. Even the Tory Govt have declared war on Landlords. If Corbyn gets in, nothing is safe, especially "second properties ". I would sell the London property and go for a hybrid of property and Stock Market based investments to provide some certainty and confidence ( property ) and also flexibility and liquidity ( stockmarket based ).

In response to Mark Alexander, others have already expressed disquiet with the equity release model on this website. The Anonymous Retiree asked what others might do in her situation and as I am in a slightly similar position I said what I was doing currently.

Reply to the comment left by bob young at 11/08/2019 - 10:08
I have no problem with you sharing your views and I am neither agreeing nor disagreeing with you. I just wanted to dig a little deeper into some of the thoughts you shared and the statements you made.

I totally accept that equity release is contentious, as is investing into property vs the stock market, and that's why this debate is so useful.

There are no right or wrong perceptions because the circumstances that each persons perceptions come from will be different. Nevertheless, each of us can evolve our perceptions by contributing to and reading reasoned debate.

Reply to the comment left by Mark Alexander at 11/08/2019 - 10:31
I agree that the debate is helpful and then individual decisions come down to weighing your own circumstances against the options.

For me, I have invested actively both in property and in the stock market (via my pension) over the past 25 odd years. In terms of property, at one time I had a local portfolio of 10-12 properties alongside a similar number of small off-plan apartments in Czech and Poland.

I decided around 10 years ago to gradually liquidate the properly portfolio using CGT allowances and moving any cash that resulted into pension, again using allowances but this time annual contribution rates. It’s been a slow, gradual and well planned process but it has worked well.

We, because my wife and I are joint owners, now have just three properties; the highest yielding ones (student HMOs) and a fairly healthy pension and ISA pot in policies in each of our names. The non-property assets are invested mostly in low cost Vanguard global multi-asset trackers which are trouble free and actually yield more that the properties we used to own - it remains to be seen how they compare over the longer term for growth. The three properties earn very well and provide the core of our retirement income with income in the pensions and ISAs is mostly reinvested. The balance of assets and wrappers gives us the ability to draw income in a tax efficient way as does that fact that assets are jointly held (property) and in one or other name (pension/ ISA).

I really don’t think it is sensible to think of it as either (property) or (shares and other assets) but more, as Mark says, what suits your own circumstances. For me, it suits me to move from active property owning/managing to a more passive share holding as I get older (age 60 now) and plan my life in retirement. Each to his/her own though.