Hey guys, and welcome to this week's Property News. So this week, interest rates are up 0.25%. So the big news. Is it big news? You know what? I'm actually…I'm glad that it's happening. Not glad because of the cash flow obviously, but I think returning to what is normalization, if that's the correct word, is actually a good thing. And I think actually, with each step, with each little step, slowly and gradually, we get back to normality and I think that's quite a good thing for the market. It means the pound will be a bit stronger, even though it dropped, you know. There's a whole heap of mis, you know… I mean, you read the news, it's all over the shop and that's the big thing right now, is that you know, UK rates actually, I think, is a good thing rising. It's been like this for over a decade or still the lowest in a decade. So that is happening. If it affects you, you need to look at your cash flow and make sure that it doesn't affect you too much. If it does, then now is the time to start taking action repositioning your portfolio because now is the time to actually really do that, to get in before it's too late, okay? The general trend in rising is interest rate rises now. So you need to get in sooner rather than later.
And remember, the tax increases are also starting to bite now, okay, with each year that goes by. And that's the first thing. Coming back to the bigger thing which is the confidence in the economy is actually quite good and I'm amazed… I'm not amazed, I'm not amazed at all, actually. It's amazing how the media is painting such a bleak picture, but the statistics are actually showing nationwide, you know, 2.5% this year growth. You know, just between June and July, 0.6% increase which is quite good. You know, these stats are still out there. So there's positive stats out there. Now, sure, London is dragging the statistics down, okay, and what you could also realize is July to August, you might find that things aren't as bright because, let's face it, the weather has been fantastic, you know, sitting in the, you know, sweltering sun and that's a great thing for people and lifestyle, but not necessarily a thing because people don't necessarily want to go out and look. They want to make the most of it because let's face it, you know, when you have one week of sunshine, you want to make the most of it. The reality is we've had multiple weeks and a World Cup thrown in there with fantastic weather. So really, it's been unseasonably slow, but it's still done quite well.
We might find that July, August actually things do, this starts to slow down. August is typically the holiday month for Europe, so everything shuts down and people go on holidays. That's normal. So expect it in the statistics and no doubt, I'll be saying this on a weekly basis. You know, things are down again, but this is what it is, all right? So that's the key there. And I think, it's interesting, you know. Rates lower and the first thing, Fergus, one of the landlords did was effectively raised his cost, so you know, his cost's obviously his rent. Now the interesting thing there is, of course, the papers vilified him, but what are we supposed to do? We're investors, we want a return. A normal business, any other business, if your costs go up, you have to raise your prices.
But for some reason, the government are trying to restrict that, not only are they taxing us on our income and on our profit, but they're also making it even harder to put effectively rents up, you know. Ridiculous, but anyway. Let's talk about London. So London. Look, London, as always, I think London will astound, but right now, London's not doing too good and what we're seeing is Countrywide and Foxtons are both paying the price, they're both two big high street brands. Countrywide have a number of different high street estate agents. So whilst it may not be a countrywide store you go to, it could be a Hamptons, you know. It could be a whole range in this. That community is about 30 different brands they've got that they control. They are the largest estate agents or property services company in the country, okay Foxtons lost $2.5 million. So you can see that it's not necessarily the house prices are dropping dramatically, but the transaction levels are, okay
So now's the time to bag yourself a bargain, but remember, prices could come off some more, so you've got to be wary of that and if you're going for long-term in London, you'll never be disappointed. The fundamentals are fantastic. So I just want to raise… So three different articles. Three different articles and this is the media. You've got positive, you've got negative. So you've got, you know, North America, you know, basically loving UK property still. Now interesting, when you read this, it's the “Wall Street Journal” talking about commercial property. You know, how they love it. But the reality is, they still love UK property residential as well. That hasn't waned and actually, we're seeing more and more foreign investors.
So in actual fact, we're seeing more foreign investors come into the market now looking to spot a bargain. Now is the time to get in. As long as you're negotiating well and as long as you're playing the long-term game, then you're fine. You know, yes, you might see house prices drop a bit, but if you can get the discount in there and buy below what is the actual value now, where you can build in your profit and that's sort of bottoming out. I don't think there's going to be a massive drop. There's always that risk, but I don't see it at this stage, I see the fundamentals of the market are very good, okay, but that doesn't mean you're going to make huge amounts of money short term. So if you're trying to get in there short term, you know, flipping, those sorts of things, forget it, okay? Someone tells you that, you know, tell them to get on their bike. Another one. “Global investors wane.” I mean, this is totally against what we're seeing but, you know, at the end of the day, global investors waning, their interest in UK property waning. I don't really know, but there's a later report out and apparently, that's so.
So another one, “House prices slipping.” Not just in the UK but in Australia, Canada, U.S. A number of different countries are suffering from this and I guess, for me, the reason for this is all of a sudden, we've gone from being a globalization, you know, heading in the globalization direction, we're turning it to ourselves. And this is the pendulum swinging and that it's got to the extreme and I think it's starting to swing back now. So we've got a big push for globalization which has happened until probably the last three or four years. You know, 2016 was really the turning point. Brexit was a turning point, a big turning point. Trump getting in, a big turning point, and now we're starting to see the pendulum come back to where, you know, localization and we're focusing on our own internal things.
The overriding push is still towards globalization because now, politicians and countries are having less control, and corporations that are global are having much more control. That's one of the big, sort of, trends that you'll see over the next few years, next decades, I guess. So coming back to Brexit, I'm just finishing off on Brexit. Look, the bottom line with Brexit, actually you know, I mean, there's an article here about, you know, it's not letting…the appetite isn't disappearing for UK property and it's not, okay The UK has been around for hundreds of years. Brexit, interestingly, is not going to stop it and the appetite for property, people who see a long-term value and are looking for long-term returns, they are still buying. And what they are doing and the reason there's an appetite for it is because they're seeing some opportunity for a discount which is fantastic. All right guys. Have a great week and I'll see you next week.