As the dust settles on what for many was a “surprise” result in the EU referendum, regardless of your political persuasion it is now time to move forward as we all try to deal with the consequences that this may bring for our future
Whilst none of us have a crystal ball (well ours has run out after predicting Leicester City would win the Premiership!) we at 2XL Commercial can only comment on what we believe may well be the short and long term
impact of the result and how it affects our clients and lenders. From a lending perspective, the message that is coming from the banks certainly on the frontline is that it is “business as usual.” We haven’t so far seen any changes in pricing of borrowing or the availability of new loans to clients who are eligible, in fact credit policy for all the lenders we have had communication from has not changed and I would envisage that remaining the same certainly in the short term. The banks need to lend money in order to survive and Mark Carney at the Bank of England confirms that the UK banks are more than equipped to continue lending.
But what does this mean for borrowers? Well, everyone’s circumstances are different, but with interest rates falling and with credit still being available this may actually represent an opportunity for those wishing to, for example, purchase their own premises for occupation or indeed reassess their existing lending in order to get more competitive rates.
Certainly those that are coming off “second tier” lending rates with the likes of Shawbrook, Cambridge and Counties, Aldermore or Interbay (anything at a lending margin of 4.5% or more) then this would be the perfect time to reassess, given that credit is still available and asset values remain intact with lending available at a margin of 2% in some cases.
As for developers, it is well documented that in the UK there is still a huge shortage of housing stock and the government are still way behind their pledges to provide both affordable and social housing – after all, people still need a roof over their heads and whilst rates remain low this could actually be the perfect time to kick start that development – although concerns about asset values will always remain. We haven’t seen any immediate instances of these falling so far, although it is still early days.
Well that’s the short term as we see it but what about the longer term? Well, your guess is as good as mine. If the politicians and those seemingly in the know are finding it hard to predict then who am I to guess? The one saving grace is that commentators are saying that we are in a “political recession not an economic one” so the sooner the powers that be get a grip of the situation, the better. The one lesson learnt from 2008 certainly in our business is “keep paddling your own canoe.”
At least that way you remain focused and driven as opposed to being sidetracked by the media. As always if you wish to discuss you or your client’s funding requirements then please feel free to get in touch. I’m now off to polish that crystal ball armed with a betting slip for Burnley to win the premiership at 5000–1!!