Banks Rip Off Customers, As Millions Move Money Into Property
good afternoon the banks are at it again this time ripping off people left right and center these are high street banks some of these banks were bailed out by us the taxpayer when they blew all their money and almost went bust in 2008 now they're penalizing their own savers whilst hitting people who borrow from them in credit cards where it hurts now this is i'm going to talk about this in a while but also we'll be talking about how this is causing investors to turn to property to to turn to things that will give them a much better return particularly older investors you may be relying on their savings in their pensions and pensions of course we've had low returns on pensions as well due to artificially high low rates i'll be looking at walmart uh they've issued a profit warning they're in problems and they are like a low-cost retailer in america i'll also be looking at how property transactions in the uk are slowing now uk banks such as nat west and i'm with natwest myself i've got one of my accountants with natwest have failed to pass on interest rate rises uh really since around 2021 and i've talked about this before and i took a friend of mine down to the bank who was a retired she's a pensioner has a lot of money in the bank they said no we haven't increased rates that was a few months ago well rates have gone up again uh about a month ago and they're still not increasing rates uh so these are millions of savers now savers are always already suffering from artificially low rates they've already been you know their standard of living has gone down if they're relying on their on their savings it's great for borrowers and people who are borrowing money and buying property but it's not so good for savers and these are the unsung people in the uk nobody really cares about savers so um this is what's happening with them they're not getting the the interest rate rises so that the banks are saving you know maybe hundreds of millions of pounds by not passing the these rate rises on now when i say rate rise the bank of england increase rates uh that banks can borrow money at um so so they can get money at very low rates i mean the official lending rate uh between the banks at 1.25 but they get money from us from us from us the savers at you know almost zero percent which then they can go on lend out so they should be passing these interest rates on now what they've done at the same time they're increasing rates for already expensive credit cards by up to two and a half percent now this is one i saw from that west uh i might put a screenshot up of this later but let me just hold that up there you can see here that the on on a credit card here that the current rate is 15.76 uh the new rate will be 18.276 that's two and a half percent higher and it shows that on a 500 pound balance that would cost another pounds per month now people don't have 500 pound balances on their car they have they have 5 000 10 000 15 000 pounds on their credit cards especially when you spread it around the different companies uh so a 10 pound a month on 500 would be a pound a month extra on 500 pound balance would be 10 pounds a month extra on 5 000 pounds and you know if you've got say 10 000 pounds that's 20 you know already just going out of your account because the banks want to charge you a bit more and i remember interest rates on credit cards always been around 16 17 18 years ago when i first had cars when it went cards in the 80s when rates were high you know base rates were 10 and 12 percent and and interest rates on credit cards were about that sort of level and now that base rates came down almost to zero in 2021 the banks still didn't put their rates down on their credit cards but now rates are creeping up they're jacking them up again and the uk based lending rate is just 1.25 percent so i i think it's wrong i think people should speak out again against this and savers should definitely uh vote with their feet and move their money somewhere where they they feel more welcome uh because they're leaving millions of savers out of pocket um and and those savers were sitting on money in banks like networks earning almost zero uh like you know point zero percent of uh of one percent you know this is the sort of crappy rates they're paying now if they're they're suffering that that sort of rate they're also having the double whammy of inflation because they're losing 9.4 almost 10 percent on their money every year so if you've got a hundred thousand sitting in the bank uh it will only buy ninety thousand pounds worth of goods and services that you can buy today in a year's time and that is last year you've lost money as well so the compounding effect of uh of that will mean that your va the value of your money is going to halve in seven years time assuming inflation stayed at a similar rate and this is why a lot of people are in effect been forced into becoming buy to let investors they're almost being forced into property against their will almost they don't want to be a landlord they don't want to have to deal with you know leaking showers and toilets that don't work and all these sorts of things and fixing washing machines they don't want to do that but they need a better return on their money and this is particularly bad for for people who are retired and perhaps get low pensions uh you know final salary pension schemes for for most private sector private sector workers have gone they've gone years ago only the government workers like the railway workers are on strike today they get final salary pension schemes nurses civil servants mps police firemen they all get final salary pension schemes paid for by us the taxpayer but the rest of workers and and people working for private companies don't they get a money purchase pension scheme which can go up and down with with the markets and depends on what you've got in your fund as to what annuity that will buy well annuity rates which gives you the pension at the end are low so a lot of pensioners are suffering and they're finding they're not able to live on their pensions so they either carry on working or some of them are withdrawing their pension funds and then putting it into property it's quite a risky strategy i go to seminars and i see people saying yes you can pull out your pension fund put it into a sas put it into a sip buy a property lend it out to people you know great you can earn more money on that on that but it's a highly risky uh venture uh particularly when i see people asking for bridging money bridging finance short term money up to 100 of the value of the property on a development so you've been asked to fund the development up to 100 of the purchase price like the value might be a bit higher but what if that development goes wrong what if they don't finish it what if they run out of money what if the materials go up and they run out of money what if the market changed they can't sell it you know they won't be able to pay the the investor that the person who's put their money in from their pension scheme from their sas scheme will not be able to pay it and i see some hugely risky loans being made to people that you know want obviously it's nice do you think one percent return per month on your money is a great return but it's not a great return if you lose all that money so my advice is for people to be careful uh with with all of this uh lending and think twice before you pull out your pension depending on the type of pension scheme you're in particular if you've got a final salary guaranteed pension a lot of people are pulling those out and putting it into sasses and then you know investing in property now while property is going up that's great they think well i'm really clever i've invested in props and i've made money well yeah but everybody invested in property in the last few years has made money you don't have to be a financial genius to do that but if the market changes and i think it will then you're going to see what happens when you know that the tide goes out and you'll see who's wearing the right pants or not so just just be careful with that but i i've certainly seen i'll just go back to these these seminars i've been so i've certainly seen people cavalierly give out advice to pull out money from their pension schemes now you can't just pull it out you've got to get professional advice but there are a lot of people setting themselves up as advisors specifically to pull people's money out of pensions and put it into to sas schemes sass are self-employed self-administered uh pension scheme that you can administer yourself and you can use that money to lend out to others for commercial properties for instance so just be careful with that i do see some funny advice and i'm a former financial advisor so i know how the industry looks at this i know that the industry frowns on uh pension transfers and uh they're very they they make you pay advisors a lot of money to to test it to see if it's the right thing to do and in many cases it might be the right thing to do um if if your final salary scheme is going to be a tiny pension and they'll give you a huge lump sum now then maybe it's the right thing to do but you've got to take professional and independent advice on on that so savers should move with their feet but as i said people are moving their money into buy to let because i mean like i i i run an estate agency open house we're advertising auction deals at the moment on properties up north from thirty thousand pounds i've got one at the moment a shop plus a two bed flat above in the northeast thirty thousand pound opening bid price now you're probably not going to get it for thirty thousand you might have to pay 33 34 35 there will be some fees to pay but even if you've got that property for 40 grand 40 000 pounds you could surely let us shop out to a takeaway or to an accountant or a bookkeeper with a flat surely you can get five or six hundred a month for that shop and that's a that's a pretty good return you know if you get you know five thousand uh pounds a year rent from a property that you've only paid in total even with doing about 40 000 pounds you know that that's a pretty good rate right that's a that's a very good yield uh four thousand a year would be ten percent so it's over ten percent you're looking at more or less getting towards twelve percent yield on that money compared with the bank where you're getting less than one percent yield or return on your money and you're getting growth so a lot of older customers are saying well look i might as well become a buy to let investor get the property fully managed and the north has proved popular because of the higher yield if you're interested in income you're not going to get it by investing on london buy to let's you're going to get very low yields of two and three percent uh up north you can get 10 to 15 yield or return on your money now prices have gone up a lot in the north but there's still good deals out there um the government's been putting money into the northeast so it's not a desolate area that it used to be this leveling up money is starting to make an impact on the north there's new industries coming in to replace the old things like ship building and steel so i i'm confident in the north and i i'll certainly be looking at that my myself now getting back to the banks it's it's not only difficult for some of the old people don't want to move their money you know they say oh i can't be bothered now the banks are closing branches it's even more difficult because they don't do online banking they might have to get two buses to get to the the nearest branch or a taxi uh so the banks are closing down hundreds if not thousands of branches and i think eventually they'll just wipe out all the branches in the high street and if you look at some of the i'll put up a photo later of a bank branch that i i was looking at in laoton which is the home of only ways essex and they've got a huge barclays branch there it goes right back and it's got i think two or three stories above the the bank and it's a double or treble fronted shop and it's next to a line of sort of restaurants and pubs along there so that's right for development isn't it you can put easily maybe 10 flats above even with the existing structures it's a nice old building and then put shops or a restaurant wine bar type of thing downstairs easily in in that street because the high street's becoming more of an entertainment place lots of restaurants takeaways that sort of thing and that's why i can see things going where people have been forced out of cash this kind of cash reset get rid of cash and put us all on digital currencies that's happening against people's wills so with the banks closing branches it's very difficult for people to even go in and talk to the banks anymore ringing them is a joke i mean you tried ringing your bank recently waiting and waiting and getting through some head office sometimes in a different country uh giving out all this in you know you have to answer 20 questions before you can get any information from them and then you know they put you on on hold again they move you around it's terrible it's awful you just cannot go into a branch anymore so that's my little rant against banks today but i i can understand there why people are moving their money into property now just want to talk about another thing before i talk about property anymore it's worn up walmart in in america this is the biggest i think business biggest physical retailer in the world uh issued a profit warning that their profits are down in the last uh will be down in this quarter uh due to customers not spending so much money customers not coming in the door and this is a low cost retailer you know walmart in america um i've been in there i like their stores actually it's full of stuff it's like a giant big you know poundland on steroids it's a great great store food and everything um but they're if they're suffering then what what has anybody got you know walmart the biggest retailer the cleverest smartest retailer uh they're suffering uh we're also seeing subscriptions to netflix and all sorts of tvs subscriptions fall because people are trying to save money don't blame them uh and and we're seeing that the imf um international monetary fund or is it mafia fund i don't know um we're not they're not an official government organization by the way but you know they've called on central banks to raise interest rate further and drive us all into recession because they don't care do they they've also cut the uk growth rate forecast for 2023 not this year 2023 i don't care what the imf say britain will grow in 2023 we're doing well against other countries right now i don't really care what they say another thing i do care about is is official data on property property transaction data according to hmrc is falling dramatically that's the number of transactions going through now you may recall in the last weeks i've been talking about property prices going up according to to lenders figures like the halifax yes they have gone up in may and june because these these are lending figures but on based on completions which is the the official figures that you collect on completions the actual properties sold and completed these are what i'm talking about here with the hmrc or land registry now based on transaction this is the amount of transactions going through figures have fallen quite dramatically in the last few months provisionally non-seasonally adjusted estimate of uk residential transactions in june 22 is 96 290 transactions that is 55 percent lower than june 2021 now known june 21 we had this massive uh peak but it's still three percent lower than may 22.
and then they talk about non-residential track transactions that's 24 lower than 2021 and 9.5 lower than may uh proposed seasonally adjusted transactions for the estimates of uk residential transactions in june 22 yeah 96 that's the same figure um okay so what we're seeing is a slowdown in the market and i think that will have an effect on on prices uh if if things do start slowing down but if things start slowing down that can be very good news for for property investors but just just keep an eye on that things uh are starting to to slow down meanwhile interest rates have gone up of course we know that but mortgage rates have gone up as well and if you think about um uh mortgage rates uh you know people don't really look at them until they come to get a mortgage but you know the days of a one percent fixed rate mortgage uh are just gone now and i don't think they're coming back soon we're looking at more like three percent 300 more um certainly in the late twos but that's still quite a good rate compared to what i end up remember paying 16 on my mortgage my first mortgage and certainly we would have thought 10 and 12 was quite a good deal but you know if rates have gone up by say two percent that means on a 200 000 pound mortgage two percent extra interest is around four thousand pounds a year or uh about 333 pounds a month that's quite a lot of money isn't it on a 250 000 pound loan which is not uncommon nowadays i'll tell you um it's an extra 5 000 a year five grand a year extra on your mortgage because interest rates have gone up that's over 400 a month so that's significant the lender takes that into account when working out your affordability and then we'll adjust the loan accordingly because they're not going to give you the same amount of money if you if the the cost is going to be higher in your pocket they used to in the old days they don't now so that that means that they'll adjust the loan downwards they'll say well based on the new interest rate this is how much we're going to give you now you can not have 250 000 you can have hundred and twenty thousand so what is it that's just a guess guesstimate by the way so what does the the borrower do they say well i either need to get more deposit from the bank of mum and dad maybe they can um get get one of those lifetime mortgages out of their property and give me more money or they they pay less for the property now i think we're going to be looking at less for the property aren't we we're going to be looking at going back to the vendor and saying i can't get that amount of money or i can't offer on that plus lenders are down valuing properties more often now so just watch out for that that will affect things in the long run however all of this is maybe bad news for sellers not good not bad news not such bad news for buyers buyers may be able to pick up a prop prices property at better prices maybe it's going to become more of a a buyer's market than a seller's market and certainly for investors there will be more opportunities out there in the coming years i believe because i think up to now the last couple years has been crazy with properties you know people getting 40 applicants to buy one property at well over the asking price i think those that's going to stop i i really do um but that's not such a bad thing it's it's just inflating everything really so um i i don't think that's a bad thing myself but let's see what happens if you want to know more about how you can take advantage of these property opportunities then why not join one of the the the free webinars that i'm putting up here i'm gonna uh put up on the page soon it's a free webinar called property beginners secrets uh it's it's it's a webinar designed to give give people that don't know much about property the initial insight into how to invest in property providing you with the tools to successfully invest in in buy intellect properties or other types of of deals not just buy to let or just learn how to find a better deal for yourself to go and live in so it's a free seminar it's actually on tonight at 7 p.m um so do click on the link there now even if you don't see this until maybe later on or tomorrow still click on the link anyway because they'll put you onto the next uh the next webinar uh available so it's a really good webinar i've seen it several times myself you'll always learn something i learned something even i've been in the business for years so do check that out and uh and they'll give you lots of insights and lots of secrets and how to get into property i'm recommending to all my friends uh just just don't overthink it just click on the link do it and and you'll learn something and maybe you can get a better return on your money now bear in mind property does carry risks it's not the same as having your money in the bank you know you the value of your money can go up or down and all that sort of stuff so i'm not advising people to do this but i'm just saying what is happening out there in the market seen a lot of people move their money into property a lot of pension funds money going into property a lot of people pulling money out of their residential properties to give to their children and grandchildren to put into property so this is one of the reasons why things are going up but i think in the long run even though prices might come down in the long run property is a great investment you can still get leverage to buy property you can use other people's money such as banks to buy property which you can't do with crypto you can't do when you're going going to buy the stock market no this is you know you can still get money from banks at quite low rates three percent to buy property and make money for yourself and your family in in the future always get advice when you you invest but for me it's been a great investment uh over over the the decades okay thanks for listening and have a great day great evening where you are do check out that webinar it's tonight 7 p.m if you miss it then click on the link anyway and you'll be taken to the next available spot thanks a lot bye for now
2022-08-05 17:43
