I had Sky News on, it was 11.58 and then I needed to spend a penny.  So I cranked up the volume and while I was otherwise engaged the reporter announced a 1.5% cut in interest rates! 

I can tell you now I was overjoyed!  However the reporter got it wrong.  In the excitement and the anticipation of a 1% cut and these turbulent times he thought the bank had done it again and surprised us all! 

Unfortunately not.  It is only a 0.5% cut.  Boo Hoo.  However they have said more cuts on the way.  I suppose we will have to wait until next month for a cut to 1%.  I think we are all getting too used to these cuts.  0.5% cuts would be big news.  Now 0.5% cuts are rather much disappointing.

What I did learn is that interest rate cuts take up to a year to really filter through.  So what is comforting is that 2009 and 2010 should be an okay 2 year period for buy to let landlords.

But thinking about what the experts are saying about low rates filtering through got me thinking.  Banks will start offering products at lower and lower rates. 

I know this because we have a competitive mortgage market.  There are lots of financial institutions that offer mortgages.  So as rates get lower and lower so will borrowing rates.  

Lower and lower rates with lower and lower property prices mean only one thing.  VERY VERY cheap mortgage payments.  Now this will not be apparent at the minute as the press report too much doom and gloom.

Job losses, shops in administration, large frauds, big sell offs and large write offs is the NORM.

If a journalist goes to the editor with positive news stories about buy to let, property investment, expanding your business, taking on more debt will surely get him the sack.

"DOOM & GLOOM I WANT, THAT'S WHAT THE PEOPLE WANT"      Says the editor.

So expect to be fed more and more doom and gloom.  And yes it is doom and gloom for some people.  But this is the minority.  If unemployment hits the worst predicted figures then that is still a maximum of 10%.  That means the rest of us, 90% of us, have a job!

Quietly the next 6 months will be one of the best times for property investment.  This is because prices will be low due to restricted finance and those who battle to get the loans out there will profit massively.

Keep reading as I will be launching a new service which I have yet to name where you can build a massive portfolio with a one off starting capital of around £30,000.

Also I have started to implement the systems so that my property management team can handle HMOs which is awesome.  Can you imagine that - buying no money down mega high yielding fully managed HMOs?  Do not miss out.

Ajay

 

 

Posted on: 8th Jan 2009