Today's post will focus on George Osborne's recent announcement regarding banking reform. You may ask why this is important to Landlords and Tenants? Well Landlords need Tenants in their premises. Tenant businesses will only be able to stay in their premises if they are able to trade, make a profit and (crucially) obtain the necessary finance from lenders.
Osborne announced the 'electrification' of a ringfence separating retail from investment banking. This would give the Bank of England power to separate the retail and investment arms of banking. The argument is that this could lead to uncertainty and effect the ability of banks to lend. Some of the biggest losses, at the beginning of the global economic crisis, were retail banks e.g. Northern Rock. We have seen several schemes from the Chancellor to encourage business lending- credit easing, funding for lending, a dedicated business bank etc. The effect of these schemes has been non existant at worst and negligible at best. We will have to wait and see the effect of Osborne's electrification. But it is important for Landlords, Tenants and their Lawyers to be aware of these changes. Tenants need access to finance in order to continue to trade (and pay their rent on time!). Let's hope that Landlords and Tenants can bank on change for the better.
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