I'm struggling to decide what to do. I own a first floor apartment in a conversion in a sought after area of London which is my home. It is currently under offer for £805,000.

I have made an offer on another apartment on the ground floor with outdoor space for £1,068,000. 

It requires a substantial refurb of £200,000 and the stamp duty (SDLT) costs to buy it will be around £50,000. 

But I am also concerned by these rumours that SDLT might be replaced in the forthcoming budget with other tax changes. 

I am a fit 76 year old who is single and still working full time as a tax partner in a London firm of Chartered Accountants. 

It is likely that I will partly or wholly retire in the next two years and sell my equity but that is not certain.

I have savings of over £700,000 of which circa £500,000 will be required to purchase and refurb the new property.

The alternative is to rent for circa £5,000 to £6,000 per month until I decide what to do. I would be likely to partially retire and spend every other month outside the UK where my daughter and grandchildren live, but timing is uncertain.

If I sell my property but do not buy the other property, I will have surplus funds of circa £1.5m to invest, I am also risk adverse. Your thoughts would be welcome.

Ed Magnus of This is Money replies: You are at a stage in life and in a strong enough financial position that you should think carefully before committing to anything that could tie up your time and resources. 

If you buy the refurb property, not only are you tying up large amounts of capital in the property, but also taking on something that requires your time, often a lot of decisions, and of course, builders.

If you have not taken on a major project before then this could be a baptism of fire you could do without given you are still working full time. 

There is also the matter of where you will live while the building work is carried out? Short term rentals are often more expensive. 

In terms of the rent, paying £5,000-6,000 a month is quite a chunky amount to be parting with.

But if it is a stopgap until things are clearer then that doesn't sound like a bad option. 

In terms of the SDLT rumours, speculation about new property taxes have been rife of late, leaving many people like you understandably worried and frustrated. 

There were reports that Rachel Reeves is considering plans to scrap stamp duty and council tax in favour of a new system.

Potentially, it could see the stamp duty bill homebuyers pay on purchase could be scrapped in favour of an annual tax for homes above £500,000. 

The speculation around taxes and wealth have kept buyer demand in check across swathes of the property market.

In fact, Knight Frank is forecasting that Prime Central London property prices will finish the year 4 per cent lower than at the start of 2025.

If you don't go for the doer-upper and elect to rent, that of course leaves you with decisions to make over where to put your money.

While you can still find plenty of savings accounts paying over 4 per cent, savings interest gets taxed in line with income tax - and assuming you are an additional rate taxpayer, there isn't any taxfree allowance either.

Putting your savings in a combination of gilts and some high yielding reliable investment trusts could be an option if you are risk adverse. 

For expert advice, we spoke to Jo Eccles, founder and managing director of prime central London buying agency, Eccord, Jason Hollands, managing director at wealth management firm Evelyn Partners, and Olly Cheng, financial planning divisional lead at wealth management firm Rathbones.

Should they buy the renovation project? 

Olly Cheng replies: Any decision around whether to rent or buy should depend on whether that new ground floor flat is likely to be a forever home. 

The lack of stairs and outside space meet the usual criteria people look for in a home to take them through their later years, so it might be a very sensible purchase. 

They should take into account that although the immediate plan involves lots of travel to see their children, the pattern we usually see is that this reduces with age, so having a firm base in the UK still seems sensible. 

I’d also add that their appetite for a large renovation project will likely decline with age, which gives a further reason to make the purchase now.

Jason Hollands adds: Your reader is making a slightly unusual choice for someone of his age in that he is considering upsizing to a more expensive property that will require extensive work done. 

He estimates this will cost him more than £510,000 once the price differential, stamp duty and refurb costs are added up which will absorb a substantial chunk of his savings war chest. 

If he proceeds as planned, he will be left with less than £200,000 in savings after the property transaction.

What we don’t know is whether he has amassed a pension fund. As a tax partner in a London firm of Chartered Accountants, I would assume he will have some pension provision in place. 

It’s to be hoped that he is expecting a good amount of equity from potentially exiting his partnership in a couple of years’ time, which could fund his late retirement. 

No doubt given his expertise as a tax specialist he has also considered estate planning and inheritance tax mitigation strategies should he wish to pass any wealth on to his daughter and grandchildren as his estate is going to be significantly above the nil rate band.

What about renting? 

Olly Cheng replies: If there is a possibility that they will move permanently abroad to be closer to family, then renting could still be a very sensible option given the amount of money that will disappear on stamp duty.

Should they do neither? 

Jo Eccles replies: You’re in a strong position with a desirable London home, substantial cash savings and the excitement of a new life chapter ahead. Given you have major changes on the horizon - full or part retirement, more travel and potentially less time in London, now might not be the time to make any significant changes to your housing situation.

You have managed to successfully secure a buyer for your current home in a tough market, which suggests you wouldn’t have too much trouble finding another in the future.

If you sell and buy now, you’re committing yourself to your new more expensive property for the long term. 

If you spend less time in London, you may regret owning a bigger property here and wish you had downsized instead or used the additional proceeds towards a holiday home elsewhere or high yielding investments to fund part retirement.

If you sell now and rent, I’m assuming that your current mortgage repayments are lower than the rental amount you mention, so you would be committing to higher monthly outgoings when you don’t necessarily need to.

If I were in your position, I would be inclined to enjoy the lower outgoings, have confidence that your property will still be desirable in the future and give yourself the breathing space to test run your new lifestyle before making any major decisions or committing significant funds to another purchase. 

This would allow you adjust to your new chapter, without tying up over £1.3 million in another property, including £50,000 in stamp duty, or taking on the stress of a major refurbishment project.

When you do decide to move, you will have more clarity about the kind of property you need and how much you’re comfortable spending - and the added advantage of being a cash buyer.

How should they invest their money? 

Olly Cheng replies: In this scenario, given the bulk of their savings would be earmarked for a house purchase, they probably don't have the time scale to take any significant investment risk. 

Cash savings accounts would be an option, although they would need to spread over a significant number of accounts for each to stay below the FSCS limit of £85,000, keeping it protected. 

Depending on their tax rate, buying a low coupon UK gilt could be a very tax efficient way of saving. 

While the interest is taxable, any capital gain would be tax free, and there are a number of gilts out there maturing over the next five years with a gross yield to maturity of between 3 per cent and 4 per cent where even for an additional rate tax payer the net return is over 3 per cent. 

In comparison the highest yielding cash accounts are paying just over 4 per cent gross, but 40 per cent tax would be payable for a higher rate taxpayer.

Unless renting is a permanent decision, investments in the stock market are likely to be inappropriate for any monies earmarked for a future house purchase. 

Unless they plan to be invested for at least five years, the volatility that comes with this type of investment is unlikely to be appropriate as they could easily end up with less than they invested if market timing works against them.

Jason Hollands adds: Clearer investment guidance could be offered with more knowledge of his pension arrangement and whether he wants to mitigate inheritnce tax. 

I note that while he has made an offer on the new property, he is not yet fully committed and is considering the alternative arrangement of renting instead. 

Nor has he fully decided when he might retire and seems to be leaning towards partial retirement. 

If he chooses to go down the route of renting, rather than tying up capital in a new purchase, then this could open up the option of making lifetime gifts to his daughter and grandchildren to reduce the size of his estate as these could be potentially exempt transfers should he live a further seven years under current rules.

Your reader is clearly at an important crossroads and is in the cusp of making some big decisions: whether to buy or rent and when he might retire or to go part time. 

He has also stated he is risk averse. Given these factors, it would seem appropriate to hold any residual savings – which could range from between £200k and £1.5 million depending on what decision he makes in respect of his properties – in low risk and highly liquid savings. 

Everyone should have a cash war chest for short term needs, but for more substantial sums where immediate access isn’t required, a portfolio of short-dated Gilts and money market instruments such as T-Bills can be constructed to deliver superior returns compared to a savings account, tailored for a particular time horizon and this can also offer greater tax efficiency too. 

Why are gilts a good option for short-term investors? 

Jason Hollands replies: Many Gilts already in issuance and traded on the secondary market offer attractive yields which have risen in recent months as the markets have become sceptical of the UK Governments fiscal plans and have therefore demanded higher returns. 

There are plenty of Gilts due to mature in the next few years that were originally issued when borrowing costs were extremely low and therefore while the level of fixed interest they pay - known as the coupon - are low, the prices they can currently be bought at on the market are at discounts to the price they will mature at. 

As directly held Gilts are exempt from Capital Gains Tax, this means that most of the returns if held until mature will come from tax-free gains, with only the modest interest element subject to tax. 

The post tax returns for higher and additional rate taxpayers in particular are incredibly competitive versus the net of tax returns from savings accounts. 

By way of example, there is UK Gilt due to mature at a nominal value of £100 on 31 January 2028 with a very low coupon of 0.125 per cent. At the time of writing this Gilt can be purchased at £91.958. 

The combination of the price gain that will be made and the fixed interest that will be received equate to a post-tax yield of 3.679 per cent for an additional rate taxpayer and a 3.686 per cent yield for a higher rate taxpayer. 

To achieve similar post-tax returns from a cash savings account you would need to find a bank offering headline interest rates respectively for additional rate taxpayers of 6.69 per cent and 6.143 per cent for a higher rate taxpayer - impossible.

If you have any property related questions you need help with, please email [email protected]