The Times Online had a really interesting article on how banks are reducing even further the amount they are willing to lend to landlords. If you are in the market you should probably head over to their website and read the whole thing, but for those of you who are pushed for time or have only an academic interest I will give you a quick rundown.
The depressing news that Lloyds bank has halved the amount it is willing to lend from £6m on up to 18 properties, to £3m on a maximum of nine properties, is probably not a huge shock to anyone but it is certainly a worrying sign of the times, especially when you take into account that two years ago the same bank would have been willing to lend in the vicinity of £14m.
This has come at a very bad time for those property managers with an eye for a bargain. As David Hollingworth, at L&C, puts it: “This is the last thing the market needs. Lloyds’ decision leaves slimmer pickings for landlords hoping to make the most of low [interest] rates and property values.”
Landlords are chafing at the bit to get stuck into these opportunities and yet the banks are holding them back. I cannot help but think that this is counterproductive in an economy that is struggling to recover from a horrible financial downturn, especially when we hear so much about economic stimulation from our politicians.
