Interest rates are going to fall to 0.5% next month maybe even to zero.
I ahd a chat with one of my university buddies who is also an investor like me and he told me about his residential mortgage:
0.28% discount to bank base rate.
So he is paying £300 a month to live in a half a million pound house!
I say good on him. But if he tells that to the wrong person i.e. someone who thought it was a good idea to fix his or her rates at 5.49% (which was a damn good rate at the time) then their reaction may not be a positive one!
In this time of the recession there are pockets of people who are doing very nicely in this recession but playing it low key:
- residential owners on variable rate trackers
- buy to let landlords on variable rate trackers
if you are one of these groups then do not make a big thing of it. I know I do but that is because you are a buy to let landlord - right?
So zero rates will be a reality by summer. It is going to be such a great summer! I reckon you should look at some longer term fixed rates. If you can get a 5 year fixed for sub 3% then that would tempt me over a sub 2% variable.
Non-property owners such as first time buyers are coming back in their droves. Interest in property is well up and who can blame them when they can buy a property at rates of 2.29% fixed.
2 things need to happen for the property market to bounce back like never seen before:
- LTVs rise to 90% for first time buyers at sensible rates
- The amount of money to lend goes back to normal
Point 1 will happen if not already happened. Point 2 is the big question. The longer the banks bottle neck it the longer we have to buy buy buy.
Who knows what 2010 has in store for us. All I know is that 2009 is going to be GREEEAAAATTTT!
We have had some awesome deals come in this week and Scotland's doors have just been flung wide open as my solicitor can do no money down deals legally!
If you want to get involved you know what to do - contact us.
Ajay
Posted on: 18th Feb 2009
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