With the turmoil created by the Billions wiped off global share prices over the last week or so, I wondered how it would affect the UK property investor?
Italian and Spanish investors have seen money market interest rates shoot beyond 6%, amid fears that their respective economies are about to crash into recession. Meanwhile the reverse is happening in the UK, even though some tipsters are still predicting that the UK is facing a “Double Dip” recession of our own.
Short-term money has become cheaper to obtain, as markets now think the Bank of England won’t raise interest rates until well into 2012. This is great news for investors who are using bridging finance in order to complete property purchases.
In the past few days UK banks and building societies have been rushing out rate cuts on nearly all their deals, so if you’re coming off an expensive fixed-rate mortgage you are one lucky investor!
However, the new financial crisis is more bad news for first-time buyers, effectively they are being shut out of the market by lenders demands for substantial deposits.
This is unlikely to ease any time soon due to the continuing uncertainty over the state of Eurozone finances and globally banks are trying everything they can to preserve their capital.
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