If you are a C&G customer who took out a 1.01% discounted tracker for 2 years in July or August 2007 put your hand up now!

If you did you could be paying £0 on your mortgage.  This is because this mortgage product is discounted to the bank of England base rate and is discounted to this rate.  If rates drop to 1% (which is highly predicted for mid 2009 but I reckon sooner) your effective borrowing rate is -0.01%. 

Not quite sure how they apply a -0.01%.  Do C&G pay you now? Just imagine that.  Not only have you seen your monthly mortgage payment go down from say £1,000 per month to £0.  You now start seeing little credits from C&G to your account because you borrowed money off them!

So what does this all mean?  It means extra cash for everyone out there.  The government want you to go spend on the high street but I know my readers and I know you will be down the estate agents, on Rightmove or in the auction halls!

I read the ticker tape news you see at the bottom of BBC News channel and it said that LandReg figures show only a 5.1% fall in house prices from September 2007 to September 2008.  This is a big difference from the 15% that is widely reported.  There is only one official statistic and that is of LandRegs. 

So have we witnessed the biggest overhyped property crash of the 21^st century?  Well yes as we have only been in the 21^st century for 8 years!  But you know what I mean.  A recession is very likely but a property crash - not very likely.

Housing is in BIG shortage now the housebuilders have gone out of business or simply stopped.  This is going to have major ramifications and is not going to be solved quick.  If you are already a landlord hang on to what you have got on the mortgages you have got.

I spoke to Barclays commercial the other day and they are offering me 3% above base on mortgages.  Spoke to NatWest they offered me between 4% to 5%.  These are ridiculous rates.  My very uncompetitive RBS loans at 2.5% above base 15 year repayment now look very competitive!  Especially when I have loans of less than £10,000 on them as I bought quite a few years back.

Let me tell you all my mortgages are looking to go double digit next year.  That means less than £100.  Rent is growing at an alarming rate due to the LHA.  The LHA is making the front page news.  Do not believe me? Check out Daily Express.  It was in the News of the World about a housing benefit claimant getting £12k rent a month and it is now about another benefit claimant living in a £1m mansion.

The problem is because the LHA is so high you can now rent out these luxury homes and get MORE in rent than from a private.  I am looking to switch all my properties to DSS as then I would have built a recession proof high income property machine.

2009 is going to be a great year for everyone in property.  Do not let these bargains get away!

Ajay

PS If you want properties request a callback!

Posted on: 11th Nov 2008