Oh my god! This is what some of the experts are saying. If this really happens we are going to see the biggest boom in property like never before which will NOT be helpful. Big booms really destabilise the market and when rates go back up the problems start.
However if rates hit below 2.5% we are talking about a £40,000 property costing only £100 per month. You can rent out a £40k property for £400+ per month so you will be talking about a £300 per month profit.
If recession really kicks in and your tenant becomes unemployed then no problem the government will pay the rent at the inflated values of the LHA rates.
So what is the downside? Well with all these interest rate cuts the experts also warn of tax rises. So only applicable if you make a profit!
So I think its best to focus on making as much profit as you can as described above and then worry about the tax later (even though there is little you can do!).
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Posted on: 14th Oct 2008