What is quantitative easing (QE) and how does it affect property?

Quantitative Easing: hard to understand, even harder to say…and about to have a serious impact on your property investing plans. In this week’s episode we explain what QE is, what effects it has, and how you can position yourself to take advantage of it.

Useful links:

• A video from the Bank of England explaining the mechanism by which QE works
• A letter to the Chancellor warning of the risks
• A report from the New Economics Foundation assessing QE and proposing an alternative
• TPP024: Inflation – your worst enemy or your best friend?
• TPP168: The disappearing middle class (and what you can do about it)

We also said we’d reproduce a table with some of the figures we discussed in the episode:

Percentage changes in asset prices since 5 March 2009:

• Average mortgage rate: -31%
• UK house prices: 32%
• UK stock market: 87%
• UK stock market with divs reinvested: 138%
• Total return from average deposit account: 5%
• Total return from UK gilts: 47%
• UK inflation: 16%
• Pension annuity rates: -27%
• Gold (in dollar terms): 38%

RESOURCE OF THE WEEK

Google Inbox is a fancy new interface for Gmail that promises to cut down the amount of time you spend answering email – with features like snoozing messages for later, setting reminders, and grouping messages in a way that works for you.