How the Mini-budget will effect the UK economy and Property prices

Short term rate volatility has gone crazy on news of the autumn mini-budget, the IMF (international monetary fund) have weighed in, city experts are commenting the UK is trading like an emerging market. 

To me, this is noise and knee-jerk. The UK government debt is trading at a higher rate (risk) to that of Greece and Italy, this is irrational. Taking a short term view the market is trading at levels that expect reduced productivity, and reduced revenue from the UK. In a time when buying the UK’s debt is in very low demand.

This has had huge knock on effects from lenders who are institutionally funded, the likes of which have had no choice but to pull funding until the price of their cost of capital is more certain and reliable. 

In basic terms, Lender’s could find themselves in a position where they are paying 5% for money that is earning 4.3% in interest, a net loss of 0.7%. 

Fortunately DJF are privately funded, not tied to the rates of Gilts, and will continue to lend at the standards we have delivered to clients for the last 5 years. 

If you are experiencing difficulties with lender’s that aren’t delivering to the service your project and Vendors require, please don’t hesitate to reach out. We have dry power available for projects.