£100bn is a very big figure.  And this is what is being pumped in to the banks to make them lend.  The biggest bank bail out in worldwide history is happening here in the UK!

This is great news.  Lending will resume which will mean people like me and you can start investing back to the levels we want to i.e. without restriction.

Now do not worry the first time buyer will not come back as quick as we will as the first time buyer needs to see calm, normality and everything back to normal before they start buying.  Even with rates so low they still need to be TOLD that everything is ok.

The press will start saying everything is ok when there is enough data to say that it is ok.  I think the fall in prices will stop in March this year i.e. the prices which are being agreed at the time the bargain is struck will stop falling in March. 

This means these prices do not fall part of the Land Registry figures until around 3 months after the deal was struck as this is when the sale actually goes through.  Then there is a 2 month lag on the reporting of Land Registry figures.  So expect good news to flow in September 2009.

In September 2009 the first time buyer will be gearing up for Xmas so they will come back in their droves in February 2010.  By February 2010 all the bargains would have gone as active property investors would have been battling the year before over the cheap deals that were on the market.

Now I hope you make one promise to yourself and I hope it is this one:

Do not less this opportunity pass you by. 

Yields have never been this high (and they are getting higher) since 2003.  It is time to bite the bait as it is only a small window of opportunity.  After this year of madness has passed it will back to the old days of sensible prices and sensible yields which is great when you own a portfolio but not so great when you are building a portfolio!

If you want some help with building a portfolio get in touch.

 

Ajay

Posted on: 18th Jan 2009