I use Ratesetter and Zopa, I have an average return from Zopa of 6.8 and an average return from Ratesetter of 5.2. Some of my Zopa investment has an element of risk but my lending rate is an average of 11.1 in that particular element. Ratesetter and some of Zopa have a safeguard to cover any potential loss, no one has lost any money yet and Zopa have been trading for about fourteen years now. Yes rates have dropped by around 1%over the last year. Steve
Can they work with overseas trusts or does the money have to come from the UK.... I'm asked for a friend.
The PP lending suggestion is thought-provoking. It looks as if ease-of-access is not quite as good as with (low interest) instant-access deposits, but better than fixed-term "bonds" from banks and building societies which often have no early-withdrawal facilities at all these days. It also appears to be the case that, at some stage, Peer-to-peer will be something that can use simple ISA tax avoidance tactics (no need for offshore trust nonsense!). Also, unlike BTL, there is no question of Stamp Duty or Capital Gains Tax. Helpful info here as usual: Peer to peer lending: boost savings returns? - MSE
Talks with the treasury regarding P2P ISAs have been going on for a year now, time they got on with it. Steve
My wife rents out a 2 bed flat and I do her accounts each year. After she has paid fee`s, repairs/upkeep and the government has taken their tax out of it she makes about £zero profit each year. The only way she will make any money is if the value of the flat goes up. Even then when she sells it she will be hit by capital gains tax. The flat also will need a new roof soon..... Personally I think she should just sell it off and be done with it, however the leasehold needs extending and that alone will cost quite a few grand as the freeholder is a bit of a scumbag by all accounts. But I do have friends who seem to be making a fortune out of buy-to-let.
on average in Hertfordshire houses/ Flats double in price every 10 years...agree you do not make much out of the rent and the new stamp duty is killing buy to let but I would not put my money any where else at the moment
Done that in 5 years on at least 6 of my bikes, but some have performed even better (and no capital gains tax)
been renting out houses on and off for 27 years real money is the capital gain careful selection of tenants is number one priority and once you get a good tenant keep rent below the market rate so they have no incentive to move do regular property inspections don't use a agent do it yourself don't take a deposit, red tape surrounding this is more trouble than its worth, just ask fior two months rent in advance landlord 118 mail out email advice regularly amongst the scare stories there is useful advice
The trouble with asking two months rent in advance is they will use the last month with out payment, leaving you without any financial hold over the tenant when they come vacate. Better off getting your head around the red tape and using the insurance based system such as 'my deposits'
you get any bit of red tape wrong with a deposit and they can claim and get several months rent as a reward for damages, there are websites that assist tenants in claiming this and whilst they can stop payment on the last month they can do this with deposits anyway and the real kicker is if they dispute anything you claim against the deposit the court will always find in favour of the tenant - the uk system is copied off the nz / austrialia system and I had the misfortune to go through a process in nz where the court found in favour of the tenant even with a signed agreement that was contrary to the courts ruling have a good friend who is a chartered surveyor - his recommendation don't take deposits as the security they offer vs the potential liabilities does not stack up
My advice would be to buy a property where there is a strong rental demand and to talk with letting agents to get an understanding of the local market. Also bear in mind that the biggest earner will be the increase in property value. Find the best agent in the area, let them find tenants (let only service) do the referencing. I only accept professional singles/couples and have used My Deposits Scheme | Deposit Protection Services | My Deposits which keeps everything legal and offers an easy and cheap way to control the deposit. Prospective tenants - ensure that they are fully reference checked for salary (ability to pay), time in job, time at last rental property and contact previous landlord. If you get a bad feeling or are unsure then don't get pushed into accepting a less than ideal tenant. Carefully check and research all the costs that you can use to minimise the tax you'll pay on the rental income. If you do the homework and don't rely on a leap of faith, it will work out well for you. Good luck.
