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  • Writer's pictureCharter HCP Team

Trains, Wars, and Interest Rate Rises

Author - Terry Pritchard

So, we all sit here contemplating what the next 11 months bring will with the news about rail strikes energy bills and interest rate increases dominating the press and with no good news following it, unless you class the Royal Families comedy disaster show as good news!

The thing is that no matter what occurs we have NO choice other than to face up and deal with it. I am not going to pretend to be a prophet and give you a glimpse of the future through my unbounded wisdom as I have no idea what’s going on other than it’s a train smash (pardon the poor taste pun)…..

Truth is we have never been busier as a Corporate Finance introducer and Due Diligence company because despite comments by colleagues to the contrary the high street is saying yes and doing very little to support that statement, which appears to be something happening across the board. Take the Ukraine war which is sucking the European economy of Billions of dollars daily but we do very little in reality to speed up the process to end the conflict. This issue with the tanks is too little way to late as Putin is amassing 500,000 more troops on the Belarussian border (and others) for a second invasion on or around the 24th of Feb (the day after my birthday for those without it in the diary) and that may be a huge turning point that we will regret forever. We cannot for very practical reasons allow Putin to win something that this short piece will not go into because its just too big a topic. The second point is that the Unions brought this country to its knees once and they will do the same again, unless we take a very hard line with them now. Again, this is a problem that cannot be allowed to drag on despite each Unions arguments, which may at points be true, but the pain the country is going through is purely down to a mixture of their lack of thought and their stubborn attitude, plus the governments unwillingness to properly engage. The final point is that the Bank of England’s process of interest rate rises will kill the housing market eventually especially the B2L sector as landlords just cannot sustain the constant pressure of higher mortgages, and tenants will start feeling the effects as well, including those on a low income and government support. That’s another thing we cannot allow to continue because as a landlord myself I cannot make the portfolio work profitably and my mortgage payments have now gone up 100pc. I am one of the lucky ones who has a core business that can swallow the losses, whereas many other landlords do not have that luxury of this and will need to either to rapidly increase income or quickly sell, or risk repossession and bankruptcy. Yes, it could get that bad if we sit still playing with our belly button fluff. So, what to do next!

Fact one is the current Government has no real answer and Labour have something that sounds great but is equally lacking in detail and also means eventually it will stop having any effect because of the structure and metrics involved. Fact two is we are the slowest growing economy in the western world right now and have become a tax driven country because of our own funding process and there seems to be no way out. It’s depressing I know, and as I said earlier I personally don’t have an answer, however I do know that the damage continued interest rate increases have bludgeoning the way unsuccessfully month after month is just making things considerably worse plus there is no real evidence this is having an effect. There needs to be a cap on this now and some support to the whole sector to avoid an issue that could be worse than the crises of 2008 in its fallout including on mass portfolio defaults (we are already seeing the start of this now with some real panic setting in). I hope that lenders start really looking at their business models and create an environment that helps larger landlords otherwise it will cause much more suffering than I believe is necessary.

Anyway, as I am now just short of suicidal after reading some of this back, I have come up with my own individual and unique plan which I have set out below. Those agreeing can phone my 24hr booking hotline “Terryair”, Its only £50.00 per minute (I have to subsidise the property portfolio somehow)

Move to either Asia or South America

No immediate fall out from nuclear war

No train strikes (they shoot those not working)

No serious taxes

No B2L market

I am block booking planes to all destinations so jump on now

See you all on the other side.

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