How will a credit down grade affect the property market? | Discuss

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How will a credit down grade affect the property market?
15/02/2012
4:22 pm
Tenant Referencing
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With the UK's credit rating outlook recently being changed to negative by Moody's rating agency the current possibility of the UK's coveted triple AAA credit rating being downgraded is ominously looming.

A downgrade is very similar to a person receiving a bad credit score from Experian. It means the individual wanting to borrow money is damaged goods in the eyes of the lenders, meaning that lenders will increase the borrowers interest rates.
So if the UK was to downgrade we would be seen as damaged goods.

So we at Landlord Referencing Services have been wondering what the ramifications would be for the UK property market if this were to happen.

 

Our Predictions:

  • A downgrade would raise interest rates and borrowing costs
    (inevitably costing taxpayers billions of pounds.)
  • It would also push rents up, causing a domino effect of;
    - increased homelessness,
    - saving for a deposit even harder,
    - escalation of competition for cheaper rentals;
    - unavoidably breeding more rogue landlords
    - AND a definite increase in rent defaults.

With the current housing crisis & recession this couldn't have come at a worse time; when people are already struggling to survive.

 

We'd love to hear both views from landlords AND tenants.

  • Are you prepared for this?
  • What are your plans for the future if this downgrade is implemented?

 

How can a landlord or letting agent benefit from joining the Only (Free) Lifestyle Referencing Company in the UK?

How can good tenants benefit from their landlord or letting agent being a member of Landlord Referencing Services?

 

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