Where is everybody putting their savings?
The recent drop in the base rate has had a dramatic impact on peoples pensions and savings, this is a fact..
So what are these people doing to alleviate this problem?
The answer more often that not is nothing.
I think the british public faces a real awakening when they stick their heads up above the sand and look at the state of their pensions/savings.
Now my job is to sell property, that is what i’m good at and that is what makes me money. In this market it should be the easiest sell possible.
My pitch would go somewhat like this….savings making you 2% max, pension value has collapsed and shows no sign or changing, buy a 2 bed flat in a good location and secure between a 5% and 9% yield along with long term capital growth.
Anyone that has ever sold property for an investment knows the challenges we face regards peoples perception of this as an investment. It is widely known as a high risk investment with fantastic gains but also devestating losses.
Now i would argue that if you do not over expose yourself, take a long term view and purchase wisely there is never a bad time to buy property.
The point remains the same, if you want your money in a fairly safe long term investment vehicle, do you really have a choice?
Where have the big discounts gone…
Further to a previous blog, i’m encountering an increasing amount of “hard nosed” developers.
Now if these developers aren’t setting the world alight with their monthly sales figures, and their year ends are looming, why aren’t they accepting the kind of offers they were last year?
Well interestingly the Government has told them not to!
Controversial i know but true in many cases.
I find more and more developers that have had their assets reposessed, now more often than not the banks that have reposessed these assets have been given massive cash injections by the government.
Now you have all these developers that are partly or solely owned by a bank, the bank is owned by the government or has shares in them…
Now this is the interesting bit….The government will not let the banks take a penny loss on their existing debts, so if the land and the build of a scheme stands the developer in at say £10m, any offer under that will automatically be declined.
The result of this is that the property market does exactly what the government injected all of this money into the economy for it not to do! Which is stagnate.
Nobody buys or sells because the market is simply not there.
