Banks Like Baying Dogs Still At Heel to Developers

Yesterday I was talking with a Letting Agent, small business in a regional town. She told me that business was difficult not only because of the economic downturn, but the combination of landlords maintaining high rents and the reduction in rent allowance to those on social welfare.

She explained that she had approached one of the main banks in this regional town who had recently taken possession of dozens of new (empty) apartments in the said town. The developer had went bankrupt and the apartments had never been sold. She said that she had approached the bank and offered to manage the apartments at a reduced rate in order to get them on the rental market.

The Bank Manager explained to her that they could not allow the empty apartments to be rented out as the local Big 6 landlords had warned the bank that if they did let the apartments onto the rental market they would all be forced to declare bankruptcy.

The same Big 6 developers/landlords continue to dominate the rental/property market in the said town, rents remain high and people are being forced out due to redundancy and the reduction in rent allowance to those who have lost their jobs.

Unless the Banks start to show some back bone the property market will not recover for many years. The market needs competition, not monopoly. Where is the competition authority in these matters, where is the Governemnt in any of its guises in these matters.

The property market must be allowed free and open competition so that it can stabilise, those in the banks who are allowing themselves to be at heel to the developers are strangling the property markets chances of recovery. If developers and landlords go to the wall so be it. Eventually and more quickly the market with find an equilibrium, it will not recover by using the tools of false economy and inflated pricing in a deflated market.