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March 2009 |
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Global Interest Rates Exchange rates £1 buys: With positive news coming from the United States Federal Reserve this month (see ‘In the news’ article) and the recent meeting of the G20 in West Sussex appearing decidedly upbeat it may be that the end of the recession is now coming into view. Global inflationary pressures continue to subside as the cost of energy, food and consumer goods reduce. Last Sunday’s decision by Opec to maintain current production levels resulted in a significant fall in the value for crude oil providing further scope for the reduction in the cost of fuel. Closer to home, on the 5th of March the Bank of England further reduced interest rates to a new all time low of just 0.5%. With many of the banks promising to adjust their variable rates accordingly, and tracker mortgages automatically reducing, this is excellent news for borrowers. As the spring time bounce in the housing market approaches we are already seeing an increase in property for sale. However, there is little change in the steady decline in house prices as all major house price surveys, apart from one, report falls during the last month. The Halifax House Price Index shows a fall of 2.3% for February. This is slightly higher than the 1.8% drop reported by the Nationwide House Price Survey and significantly higher than the meagre 0.8% fall identified by the Hometrack survey. Only the Rightmove survey reported an increase in prices at 0.9%. Commenting on the figures Hometrack’s director of research, Richard Donnell said: "Levels of buyer registrations, sales agreed and new instructions all increased in February, reversing a downward trend seen over recent months. New buyer registrations rose by 17% while sales agreed increased by over 35%. There was also a modest increase in the supply of homes for sale which grew by 6.7%. Southern England – London, the South East and the South West – saw the strongest demand." Are we approaching a turning point in the downward trend of house prices? If we are, current property bargains may soon begin to dry up, so now really is the time to invest in property.
In the news Bernanke hopeful for US recovery The head of the US central bank, Ben Bernanke, has said he expects America’s recession to end this year. "This decline will begin to moderate and we’ll begin to see a levelling off," the Federal Reserve chairman told the CBS 60 Minutes TV programme. But he said the world had come very close to financial meltdown last year, before governments stepped in. Mr Bernanke warned that the biggest risk to recovery would be a lack of political will to solve problems. The BBC’s Sarah Morris says it is unusual for the Federal Reserve chairman to talk to the media in this way – but Mr Bernanke said he decided to go ahead with the CBS interview because this was an extraordinary time. His comments came after the UK government warned that the upcoming G20 meeting was critical if the world wished to avoid the economic turbulence seen in the 1930s. Mr Bernanke told the US Congress in January he believed that the recession that took hold at the end of 2007 would end this year. He stuck to that view in the interview while suggesting that recent developments may have set confidence back. "We’ll see recovery beginning next year," he said but added recovery could be put in jeopardy if "we don’t have the political will". He said a government fund of $500bn was stabilising the mortgage market and business lending was picking up. The benchmark Dow Jones index rose by about 10% last week after plunging to 12-year lows. However the US jobless rate jumped to 8.1% in February – the highest rate since December 1983.
Over the coming months we will be delivering a series of free 1 day training workshops for our registered members. These events are designed to give attendees an understanding of the business concepts behind property investment.
As an open and ethical company we believe it is essential that our clients have an understanding of these concepts before investing in property, whether they purchase through us or another company. We therefore offer this as a free course to anyone who would like to attend.
These informative sessions receive excellent feedback from all those who attend. They are delivered only to small groups and convey real information; they are in no way a sales pitch.
If you would like to attend one of these sessions please take a look at the events calendar on our website www.w-wideproperty.com to see which date and location best suits you, then simply give us a call on 01235 553569 and book your place. Remember, there is no charge for attending one of our training workshops.
Location: East of Central America Largest island: Cuba Government: Varies widely Multi country membership: CARICOM, CSM, CSME, ACS (membership numbers of each varies) Currency: Local currencies mainly linked to US Dollar or Euro (US Dollars widely accepted) Population: 37.5 million Language – English, Spanish, French, Dutch, Portuguese & numerous regional languages The Caribbean is a region consisting of more than 7,000 islands in the Caribbean Sea. Landing here in 1492 Christopher Columbus believed he had reached the Indies (Asia), it is this that brings the name ‘West Indies’ and to this day the people of the Caribbean are collectively referred to as West Indian. Grouped into 27 territories and states the region consists of the Antilles, divided into the larger Greater Antilles which bound the sea on the north and the Lesser Antilles on the south and east (including the Leeward Antilles), and the Bahamas and the Turks and Caicos Islands, which are in fact in the Atlantic Ocean north of Cuba, not in the Caribbean Sea. The Caribbean is one of the planet’s premier holiday destinations drawing millions of visitors primarily from North America, Europe and increasingly Russia and beyond. Tourism is the mainstay of many Caribbean nations accounting for 30% of total gross domestic product ($20 billion). Since 1990 international arrivals within the Caribbean have increased by 41.2%. Of the main Caribbean holiday destinations the Dominican Republic is now dominant attracting 4 million visitors during 2008. To put this into perspective Cuba and Jamaica combined attracted visitor numbers of 4.1 million during the same period. So why invest in Caribbean property? With many well known Caribbean nations continuing to boom during the global economic downturn the Caribbean is a fantastic place to invest. The region is fast becoming associated with modern, highly luxurious, all inclusive resorts and new ever more luxurious resorts are being built all across the Caribbean as individual nations try and grab a slice of the tourism market; as such there is a great deal of choice for the discerning property investor. Many Caribbean destinations still have strong ties with major European nations (UK, France, Spain, and the Netherlands) with many still under direct control. As such European languages are widely spoken with English by far the most common language. Also as a result of European influence most Caribbean nations conform to major European legal systems, for instance the Turks and Caicos Islands are governed by to English law. This makes much of the Caribbean a very safe place to invest. To make investing in Caribbean property even more enticing many countries are designated tax havens meaning that taxation is either very low or in many circumstances non existent. Greater stability, good legal and banking systems, tax breaks and great choice make the Caribbean one of the best investment regions in the world. Interested in finding our more? Give us a call today on 01235 553569 to hear about our fantastic Caribbean opportunities starting with a required investment of just £1,000. Sources: ft.com, World tourism organisation, Onecaribbean.org
Mentoring
If you can’t make any of our training workshops or you would like help in creating a goal achieving strategy, then why not consider booking a one to one mentoring meeting. Our mentoring programme is designed to help you achieve your investing goals by giving you the tools you need to be successful and then guiding you in the right direction.
Mentoring is a service that we offer to all of our clients without charge. It is important to us that you invest with knowledge and understanding.
If you would like to sit down with one of our highly experienced consultants simply give us a call on 01235 553569 and we can book a suitable time and date for you.
What is it? – Leverage Leverage is one of those awful terms that people in all industries tend to throw around like it really means something. The thing is, in the world of property investment, it really does. Take a look in the thesaurus and you will notice several alternative words for leverage that all follow the same pattern: influence, power, force, control etc. Relate these back to property investment and leverage is all of these things – it is a powerful force that gives you tremendous influence and control over your investment returns. Quite simply, leverage (also known as gearing) is the means of achieving a large output from a very small input. Think of a lever or a set of gears. By inputting a small amount of energy you can achieve an output of greatly increased force, often by a factor of three or four times or more. Think of this with money. You want to buy an investment property that will generate the maximum return on your initial investment. Your return will be increased the lower your initial capital investment, so the key is to put in as little money as possible. But how do you achieve this? You use the power of OPM (other people’s money): you borrow it! Even in today’s market it is possible to borrow the vast majority of capital required to purchase a property. Imagine you buy a £100,000 property using all of your own money. If the property value increases by 25% you have a return on your investment of 25% right? Now imagine you purchased the same £100,000 property using £25,000 of your own money and £75,000 of the banks money. Now if the property increases by 25% you have a return on your investment of 100%; and with the other £75,000 you still have, you could have purchased another 3 properties. This is the power of leverage!
On a lighter note "The man who smiles when things go wrong has thought of someone to blame it on."
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| The Worldwide Property Group Ltd. Suite A & B, The Courtyard, Abingdon, Oxford. OX14 5SE Tel: 01235 553569 email: enquiries@w-wideproperty.com Web: www.w-wideproperty.com Copyright – The Worldwide Property Group Ltd 2009
The Worldwide Property Group is a marketing agent for developers and whilst we endeavor to ensure the accuracy of information contained in this site, including figures and forecasts at the time of publication, the Worldwide Property Group does not guarantee or take responsibility for their accuracy |
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