The jittery Bank of England Monetary Committee has set ther stage for a big shake out of over extended property owners with their suprise increase in base rates.
Their excuse is as ever inflation, however with exporters hurt and imports suddenly even more attractive it spells more unemployment, and you guessed it more mortgage arrears.
Europe, America and Asia must be rubbing their hands together.
From an property investor perspective, stand by for "distressed sales" opportunities from those novice Buy to Letter's who only entered the market in 2003, and those on a "off-plan" promise who now cannot afford the final installment let alone find a tenant. In addition, recent first time buyers having over spent at Christmas will be tightening their belts and worrying about their cost of borrowing.
On the negative side new tenants may find their rents harder to pay, and may have their jobs under threat.
Overall it may be better to steer clear of the UK (unless you can get a 10% rental yeild, rather than the avaerage 5.5% in London-which is less than their mortgage rate-so taking more money out of the ecomony).
As I have stated in other blog,and despite the reports of the vested interest group the UK property market just like the USA peaked in 2005.
So if you have the chance get out of UK property for a while. Gold Bullion is good.
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