Most prominent landlord pleased by interest rate cut
Rupert Dickinson, the chief executive of Grainger—Britain’s most prominent landlord—has indicated that he is very pleased that the Monetary Policy Committee has decided to cut interest rates by a significant 1.5 percent. Dickinson told journalists that this major cut suggests that government officials realize that the current global recession might very well be a prolonged one and that “decisive” action is absolutely essential. Grainger’s CEO also believes that this interest rate drop might help stimulate the stagnant housing market, which is still crippled in the UK by rapidly deflating prices and the difficulty of obtaining new mortgages.
George Osborne, the country’s Shadow Chancellor agreed that the interest rate decrease was necessary, but he also indicated that this move served as a key sign that Britain’s economic outlook was grim. Osborne believes that it is crucial that any cuts benefit small businesses and homeowners, as these two groups have been hardest hit by the global financial crisis.
Landlords wishing to expand their portfolios have also found it increasingly difficult to do so, as it is becoming very challenging to receive new mortgages at reasonable rates. The one silver lining for landlords throughout the entire crisis has been that the number of tenants in the UK is actually increasing as a growing number of Britons put off the purchase of their first home and rent instead, in order to wait out the recession.