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BTL debt has personal recourse so from a risk
Yes, sorry, I wasn’t clear. I meant no risk from the point of view of using the money to give to your child as a house deposit - if house prices rocket it works, if they don’t your child will find it easier anyway.
Hefty-
if house prices rocket it works, if they don’t your child will find it easier anyway
Doesn't this assume that there is some "Goldilocks" scenario in which house prices crash but your child isn't affected by whatever cocktail of factors (interest rates, wages, unemployment) caused house prices to crash?
I sort of get the "natural hedge" point but I think it net adds risk rather than taking it away. Particularly when you contrast it to the generous tax incentives like Junior ISAs that you can use to save cash for your kids. £9k pa in one of those for 18 years and they will be just fine.
NickCJ
BTL debt has personal recourse so from a risk perspective it’s the same as clearing out the offset account on your primary residence to buy equities. Or portfolio margin loans (which do exist).
At current rental yields there really isn’t very much rent left when you take maintenance, voids, interest and taxes into account.