property investors network

Bank of England cuts the interest rate

As expected today the bank of England has cut it base rate by 0.25% to 5.25%. But what effect will this have on you as an investor?

Now is a fantastic time to invest in property as we have 3 factors working in our favour for the very first time in history. Theses are:

1) Falling house prices: I don’t think prices will fall as much as some of the doom mongers are predicting but the fact is that most sellers think the market is going to come down, which means that they are more motivated to sell and so may well consider a much lower offer that they would not have entertained six months ago. Great if you are buying more property like us.
2) Rising rents: Over the last six yeas property prices have shot up whereas rents have failed to keep up. However, now the prices have slowed and are even starting to decline ,rents are actually starting to rise. This makes it easier to get investments to “stack up.
3) Falling interest rates. At last interest rates are on their way down again. In December we had the first .25% interest rate cut and then another .25% cut to bring the bank of England Base rate down to 5.25%. As long as the mortgage lenders pass on the benefit this means that more deals will stack up and so it will be easier to purchase.

These three factors mean that there is currently a great opportunity for your to acquire property. As long as you are buying for the long term and make sure you can cover the short term holding costs such as voids then you cant really go wrong. The biggest challenge you will face will be competing with all of the other savvy investors in the great Property rush of 2008. To find out how to ethically beat these other investors you may want to check out this month’s PIN evening seminars in London and Birmingham.

Simon Zutshi