Author Topic: Buy to Let vs S&S ISA - which is better considering the new tax changes  (Read 164 times)


  • 5 O'Clock Shadow
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  • Posts: 4
Hi All,

This is partially tax related and very uk specific, but if there's a better place to ask let me know.

I bought my first property at the start of last year, a one bed in a dodgier part of a quickly gentrifying area (Leith, Edinburgh for those interested. It's considered the hipster capital of Scotland 😂 though my part is still pretty rough).

After 18 months I've decided to move come spring, by which point I hope to have finished some renovations. This is partially due to it being a bit far from my work (2.5 miles which I run/walk everyday but is slightly inconvenient) and the area being rougher than I first thought /  having become more snobby than I'd realised.

The question is do I sell up, buy a new place in my preferred pricier area and put any difference in my vanguard account or do I let the old place out and buy a second, better but not perfect, property to live in.

On one hand my current place is still a great investment. It's surrounded by attractive or up and coming areas on every side, it's next door to an industrial estate with several hipster market/festivals popping up and near several new builds. According to several articles I've read, one beds in the area are expected to increase 20%+ in the next 5 years. It's just my street and the 3/4 next door that are really run down. The pub next door, which was closed when I bought the place, re-opened but is a nice beer pub rather than the dive it apparently used to be.

On the otherhand there's the work involved in buy to let and the lack of liquidity. There's also the tax changes, and renting this out would push me into the upper tax bracket. Some of that could be offset by pension tax relief but I'm not sure how interest relief and pension relief interact. Also I couldn't afford my perfect home immediately without selling my current place but I could still upgrade area and that might stop me getting carried away.

In terms of costs I'd expect the btl mortgage to be around 360 a month but the rent to ~600, so should pay for itself but not much more after tax and expenses.

Any thoughts/advice? Happy to give more details too.