I had an interesting chat with a landlord from Tinwell Road who owns a few properties in the town. We had never spoken before because she currently uses another agent to manage her Stamford investment properties, yet after following my property blog for a while, the lady wanted to know my opinion on how the recent interest rate cut would affect the Stamford property market, and I wanted to share my thoughts with you too.
Well, it’s been a few weeks now since interest rates were cut to 0.25% by the Bank of England as they believed Brexit could lead to a materially lower path of growth for the UK, especially for the manufacturing and construction industries.
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 Stamford, because even though we have had a number of local success stories in manufacturing and construction, a large number of ‘Stamfordians’ are employed in these sectors.
In Stamford, of the 10,161 people who have a job - 1,317 are in the manufacturing industry and 803 are in construction, meaning...
13% of Stamford workers are employed in the manufacturing sector and 7.9% of Stamford workers are in construction.
The other sector of the economy the Bank of England is worried about, and an equally important one to the Stamford economy, is the financial services industry. Financial services in Stamford employ 322 people, making up 3.2% of the Stamford working population.
Together with a cut in interest rates, the Bank of England 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 Stamford 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 Street banks pass on the base rate cut to people and businesses, meaning the banks will have lots of cheap money to lend for mortgages, and in turn this will have a huge effect on the Stamford 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 Stamford 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 even how Stamford could be affected).
The severe undersupply means that Stamford property prices are likely to increase further in the medium to long term, even if there is a dip in the short term. This only confirms what every homeowner and landlord has known for decades, that is, 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.
For professional, trustworthy advice on buying, selling, renting and managing your personal homes and property investments please call David Crooke, UPP Property Agents.
Tel: Oakham 01572 725 825 or Stamford 01780 484 554
Email: david@upp-property.co.uk / www.upp-property.co.uk
In Stamford, of the 10,161 people who have a job - 1,317 are in the manufacturing industry and 803 are in construction, meaning...
13% of Stamford workers are employed in the manufacturing sector and 7.9% of Stamford workers are in construction.
The other sector of the economy the Bank of England is worried about, and an equally important one to the Stamford economy, is the financial services industry. Financial services in Stamford employ 322 people, making up 3.2% of the Stamford working population.
Together with a cut in interest rates, the Bank of England 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 Stamford 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 Street banks pass on the base rate cut to people and businesses, meaning the banks will have lots of cheap money to lend for mortgages, and in turn this will have a huge effect on the Stamford 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 Stamford 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 even how Stamford could be affected).
The severe undersupply means that Stamford property prices are likely to increase further in the medium to long term, even if there is a dip in the short term. This only confirms what every homeowner and landlord has known for decades, that is, 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.
For professional, trustworthy advice on buying, selling, renting and managing your personal homes and property investments please call David Crooke, UPP Property Agents.
Tel: Oakham 01572 725 825 or Stamford 01780 484 554
Email: david@upp-property.co.uk / www.upp-property.co.uk
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