Not:

Divorce

Depression

David Dickenson

But:

DEFLATION

We are all doomed if this happens.  It works like a negative feedback loop.  As soon as prices of goods start to fall the consumer thinks if they wait tomorrow prices will be cheaper.  So in effect they never buy and prices spiral downwards and everyone goes out of business.

Now before you start to slit your wrists HOLD ON!  It is only a rumour.  The fact that the PM used the word Deflation is a concern and hence focuses everyone to make sure this does not happen.

There is one way that will really assist deflation not to occur:

Interest rates should be set to zero.

I really think the Bank of England will do this.  They really have acted slow and now they are now making brash cuts without shocking the market too much.

They have primed us up for 1.5% cuts as shown this month.  I reckon a 1 to 1.5% cut for December.  Then further cuts in January and February and by March we will have historic times as we will be in the ZERO ZONE.

So what does this mean for us landlords?  It is absolutely marvellous times ahead.  I will see my mortgage payments reduced by 75% and I will achieve my personal financial goals 2 years early!

I have already received some of my interest rate reduction letters from my lenders.  One of them came back and they said the rate I am paying will be 3.34%.  Another mortgage payment has reduced to £80.

And it just gets better.  One of my sourcers obtained an 80% LTV buy to let mortgage for his client at 1.75% above Bank Of England rate.

So with zero rates on the horizon, the frozen credit melting and property prices being lower then it simply is the time to buy!!!!!

If you want help then contact us.

Ajay

Posted on: 19th Nov 2008