UK Interest Rate Cut, Good for Property Investors

In August 2016, the Bank of England (BoE) took a decision to cut interest rates by 50%, from 0.5 to 0.25 based on a belief that it will stimulate the economy, following the effect of United Kingdom’s exit from the European Union. This measure was designed to sustain growth and employment.

Whilst it is true that I am glad about this decision, the big question is, how does it affect you?

As a property investor, let me share with you my viewpoint on the rate cut. As a matter of fact, there’s never a better time to be investing in real estate.

For property owners and investors who are on Standard Variable Rates (SVR), it is a happy day because that simply equates to cheaper mortgages, which means there will be more money in my pocket.

The reality of this current base rate is that, before the BoE increases interest rate again, the economy would have been better. Nevertheless, through all of this, rents keep going higher and that will continue. I see opportunity here for property investors, although there are predictions of doom out there but I do not want you to see that.

When interest rates go down, it is an opportunity to get access to cheap funds, as the BoE puts it, the cut in Bank Rate will lower borrowing costs for households and businesses (http://www.bankofengland.co.uk/publications/Pages/news/2016/008.aspx)

A lot of vendors are now jittery that the economy is going south, they will be willing to sell,. The amateur investors will be scared of the market, don’t let that be you. I want you to take advantage of what is happening right now, the banks still want to lend but the important thing is for you to go out there to look for good cracking deals.

Foreign investors are going to be trooping into the UK now, people from Russia, United Arab Emirates, Nigeria and from all over. They will be coming to take advantage of the depreciation in value of the pounds sterling. We are here, we can’t be a slacker, and we need to take advantage of this opportunity. Like the great investor, Warren Buffet said, ‘be greedy when people are fearful, and be fearful when people are greedy’.

This is the time to be greedy my friends, let’s take the bull by the horns; this is the time to be greedy if you are a real estate investor. It’s not the time to quit, not time to get melancholic about the economy, but to brace it, because it brings opportunities.

Brexit brought opportunity; the rate cut will bring a lot of other opportunities our way.

Remember, keep living life to the max, keep serving God and keep helping as many people on your journey to prosperity.

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