Savers and the 0.5% Base Rate

What should savers do now that Bank Base Rate has hit another all time low?

If I were cash rich I would be looking to make some buy to let investments. In my local area yields over 6% are possible again while currently the best savings rates are around 3.5%.

Obviously those with debts would be much better paying these off than saving. Similarly now would be a very good time to be making overpayments on your mortgage or depositing in your offset account.

With sensible negotiation a cash buyer should be able to purchase a property at a price towards the bottom of the market. This should also give a good opportunity for long term capital growth.

So those with significant chunks of capital should be celebrating and buying property and not whinging about low interest rates. As always during economic crisis there is good money to be made by those with liquid cash. So savers, stop moping and start making that money work hard for you.

It looks like some people have already realised this.

Over the weekend a couple of local estate agents have reported having sold 7 properties already this month.
I also spotted this just as I was about to click post.

However, the diminshing returns savers are experiencing may inadvertently help the property market as those with savings look for an alternative to cash in the bank. One of the options that is increasingly being explored, is purchasing property as a buy to let investment in order to generate an income.

From: Will interest rates reache zero percent?