I had an interesting chat with a Taplow landlord who owns a
few properties in the town. We had never spoken before, but he approached me
after reading my blog on the Maidenhead Property Market. The landlord wanted to
know my thoughts on how the recent interest rate cut would affect the Maidenhead
property market and I would also like to share these thoughts with you……
Well it’s been a few weeks now since interest rates were cut to 0.25% by the Bank of England as the Bank believed Brexit could lead to a materially lower path of growth for the UK, especially for the manufacturing and construction industries. You see, for the country as a whole, the manufacturing and construction industries are still performing well below the pre-credit crunch levels of 2008/09, so the British economy remains highly susceptible to an economic shock. This is especially important in Maidenhead, because even though we have had a number of local success stories in manufacturing and construction, a large number of people are employed in these sectors. In Maidenhead, of the 32,658 people who have a job, 4,685 are in the manufacturing and construction industries meaning
and Construction
The other sector of the economy the Bank is worried about, slightly
less relevant to the Maidenhead economy, is the Financial Services industry
which employs 1,052 people in Maidenhead, making up 3.2% of the Maidenhead
working population.
Together with a cut in interest rates, the Bank also
announced an increase in the quantity of money via a new programme of
Quantitative Easing to buy £70bn of Government and Private bonds. Now that won’t
do much to the Maidenhead property market directly, but another measure also
included in the recent announcement was £100bn of new funding to banks. This
extra £100bn will help the High St banks pass on the base rate cut to people
and businesses, meaning the banks will have lots of cheap money to lend for
mortgages ….. which will have a huge effect on the Maidenhead property market
(as that £100bn would be enough to buy half a million homes in the UK).
It will take until early in the New Year to find out the
real direction of the Maidenhead property market and the effects of Brexit on
the economy as a whole, the subsequent recent interest rate cuts and the
availability of cheap mortgages. However, something bigger than Brexit and
interest rates is the inherent undersupply of housing (something I have spoken about
many times in my blog and the specific affect on Maidenhead). The severe
undersupply means that Maidenhead property prices are likely to increase
further in the medium to long term, even if they remain flat in the short term.
This only confirms what every homeowner and landlord has known for decades ..
investing in property is a long term project and as an investment vehicle, it
will continue to outstrip other forms of investment due to the high demand for
a roof over people’s heads and the low supply of new properties being built.
............................................................................................................
"Maidenhead's Landlord’s best kept secret"
If you are a private landlord in Maidenhead and you are struggling to find the right tenant for your property – Then why not advertise for FREE with unlimited text and pictures on the Maidenhead Houses to Let, For Sale or Wanted FACEBOOK GROUP.
There is a growing membership of over 500 local Maidenhead members most of which are tenants.
Click the Link to join. Tenants and Landlords welcome!
No comments:
Post a Comment