Manchester Property News

David Boyd, Managing Director, PAD4U Letting Agents Manchester writes:

Double Dip is an unpleasant term that is doing the rounds at the moment and we're not talking about Nachos.  The term has been whispered around the City for sometime, but it's now turning into a shouting match.   But why?  A number of reasons, firstly, Quantitative Easing has been stopped, the Bank of England is no longer effectively printing money which has until now assisted the banks in repairing their balance sheets and allowed some semblance of lending in the mortgage markets.  Secondly, the UK's debt continues to grow at a pace that the City feels uncomfortable with especially in light of the difficulties that Greece and thus the Euro have suffered as confidence drops in their ability to pay back these huge debts.  The UK balance sheet is in just a precarious state the response so far from the markets has been more muted, perhaps in the belief that a Conservative government would cut the deficit, however with the polls now undecided about which party if any will win outright at the next election, the markets are uncertain and uncertainity is never welcome in the City.

The consequence for landlords in the main is a tightening in lending from the banks, who are ever more concerned about their balance sheets than lending the monies that have been gifted through Quantitative Easing and the various state backed guarantees that tax payers have the burden of.  When mortgages are granted the terms can be eye watering, there is little that the landlord can do, whilst the Government is placing pressure for lending in the residential market there is no such push for buy-to-let mortgages.  Landlords will have to work harder to finance their portfolios.  If you are looking for assistance with buy-to-let mortgages our mortgage brokers can offer free independent advice, please email [email protected].

The outlook however is not all doom and gloom, the difficulties within the market are throwing up opportunities for savvy investors to capitalize on.  Interest rates are likely to stay low for some time.  Also, the rental market we believe is likely to remain strong throughout the crisis even is pressure remains on rents to stay competitive for the time being.  In additional I'm not certain we've heard the last clangs from the printing presses as they produce new money!