Low interest rates set to stay as economy hangs onto hopes of a recovery, property investors let out a sigh of relief

Mervyn King, Governor of the Bank of England in a report to the House of Commons Treasury Select Committee, today said that he is more interested in supporting the UK economy recovery than using interest rates to slow down the rate of inflation.

Wow – now what does that say to you as a property investor?

Bearing in mind I am not an economist, I think we are hearing from the horse’s mouth that the world is still volatile and nothing guaranteed. Economic growth of 1.1% last quarter does not mean we are out of the financial crisis. Mr King clearly hinted that (unless something else happens) he would be advising to keep interest rates low. He knows that any increase in interest rates will have a thunderous effect on the UK economy and property investors alike.

What does that mean for us as property investors? First great news if you have a number of investment properties on buy to let property tracker rates – I intend to leave my buy to let mortgages tracking base through until Christmas and then review again.

As home owners – it will be a relief, because interest rate increase will push a lot of people into repossession – so maybe not such good news if you are an investor that buys repossessed property.

The report from the BBC stated that the National Institute for Economic and Social Research, believe that the political economic worries are all ‘political theatre’. Personally I find that an extra-ordinary comment and would simply refer you to the work of Robert Kiyosaki and his books Rich Dad Poor Dad and  the Conspiracy of the Rich !

To read more about my ramblings on the economy and my witch-like predictions check out the free stuff section of the website and download the free quarterly reports or follow this link for the Late Summer edition.

I still think that as property investors we need to focus on building cashflowing property portfolios, Cashflow is crucial to any business including property investment. Don’t get greedy and forget the lesson of the crash – cashflow, cashflow, cashflow


To our mutual success, wealth and happiness
Vicki – The Property Mermaid

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