About time we had some good news! 

I have been doing some research on interest rates and I have found some interesting stuff:

1. There is more than a slim chance that the base rate will drop by 0.5% this month
2. The base rate could be as low as 4% (i.e. 1% cut) by Christmas
3. The base rate could drop to even below 3.5% by Spring

This will be absolutely fantastic news if the experts get this right.  This would mean you will see rates not too dissimilar to the rates of the old days.

Think about it, if rates drop to sub 4% after the new year, borrowing rates will be sub 5% and yields will be at least 10%.  That equals FAT MARGINS for landlords of 5% and greater.

So every £15,000 leveraged up to £100,000 will make you £5,000 per year.  If you use some clever little money down strategies then you could expect £5,000 to make you £5,000.  That is 100% return in my books and that is just the cashflow.

So, if you manage to bag a deal now, complete in 3 months, you could have just exploited one of the best things about property:  the slow moving nature of it.

So if you are tempted to get in to property investment but still not sure wait until Thursday and see what the Bank of England does to see if he is going to signal a mini property boom.  If he does I suggest you get in quick!

Ajay

 

Posted on: 6th Oct 2008