Negative Interest Rates, Is That Good Or Bad For Property?

Negative interest rates benefit the banks and in some way benefits us

The current market is doing well, it is stimulated by the government. Negative interest rates are neither good nor bad. They are relatively indifferent.

Q: Bank of England, talking about negative interest rates, is good or bad for property? 

There's a couple sides of this, it's actually a good question. The first side is this, I don't think we will receive negative interest rates. Don't think for a second the banks are going to pass that onto you. In fact, a lot of mortgages now if you read them they're collared.

In other words, they can only go to a certain rate. Negative interest rates benefit the banks but in some ways it benefits us because the banks have more leeway they're making more margin they can take a bit more risk and they can lend out which keeps the market afloat. 

It's a very different market in Scotland, it's a smaller market. There's some fundamental changes namely oil and gas with all the issues there and that I know Aberdeen and a few of those places house prices have dropped considerably. So, it depends on how that's reacted.

Now make no mistake right now the market we live in is okay if you know it is stimulated by the government, it is stimulated by low interest rates, it's stimulated by you know a currency inflating the currency away and unfortunately that's just the market we live in now. If you have a look in the 70s we didn't really understand this you had some pretty shocking times.

I remember my parents went through that I was too young to really understand it. The 80s again and each time the recession has got less and less of an impact. If you lose your job, that is a horrible impact, I agree and I'm not discounting the individual but as a country, it's less. Back then when a country went into recession that country could go into recession but not the rest of the countries. 

Negative interest rates coming back onto that I think they're neither good nor bad. I think they're relatively indifferent. If they give the stimulus and they help the banks and the banks then continue lending which I think they will have too because the political power will be hey guys get out there and lend, do the right thing. I think that's a good thing so for me all of these layers that we're talking about what they mean is they're going to be supportive measures to stop that.

If you're waiting around and you're thinking I'm going to wait for these 30% drops and all that stuff. I've got bad news for you you know, I look at Australia and one of the things that Australia does, Australians love property and they invest in property and they're so heavily invested in property that actually if their market crashed their whole economy could be devastated for years. So the government has zero interest in allowing that to happen. I think that is what's happening in a number of places around the world. 

Now you have a you know the bigger issue here is you've got a choice yeah a lot of pressure is being put on you to get out of but-to-let, a lot of people are saying it's too expensive, can't make money you know it's it's no good advice, that's dead blah blah blah The reality is the alternative is not much of an alternative yeah you've got to make a choice now and hopefully you've already made it hopefully if you do this in this channel you've already made it.

Property you know you're going to make a choice whether you're a landowner okay in other words a landlord or you know someone who lives on the land now if you think about years and years ago you had peasants you had the landlords and you had the royalty the royalty these days are called billionaires and multinational companies.

And they will continue to get richer and richer and richer and control more and more and especially now with AI and data. We'll talk about the seminar series we're gonna go into and we'll talk about the autumn seminar series in a second.

That's one of the topics I get into here which is about you know the billionaire class then you've got the landlords you want to be part of that. Now obviously you can be part of the billionaire fantastic. But you want to be a landlord,  you don't want to be you know if you're looking back at years a pleb, a peasant you know the people that don't own property.

I want to be squarely there and that's not a derogatory term from my perspective that is just you have the choice of not owning land and being controlled by landlords and billionaires because make no mistake the billionaires are in control. Politicians now you know they just don't have the power they used to okay and they're unlikely to get it back because now AI and you know all this sort of stuff is taking over automation.