Saturday, Aug 25, 2007
Ratings agencies suddenly go bearish
Firstrung: Ratings agency expects arrears and repossession levels in UK to rocket
Fitch Ratings has announced that they expect arrears and possession levels in the UK sub-prime mortgage sector to continue to increase over the next few months... The agency recently published their latest quarterly performance report for the sub prime mortgage lending sector revealing a deterioration in arrears in Q2 2007 compared to Q1 2007.
Posted by converted lurker @ 08:01 AM (630 views) Add Comment
10 Comments
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1. su said...
I'm wondering whether the increasing number of people who can no longer afford repayments will flood into rented accom. If they do, surely this added demand could lead LLs to increase their rents...
2. Renter said...
Nah, there's so many desperate LLs out there paying the mortgages on their buy to lets out of their own pocket, that renters have loads of choice. Most landlords are just happy to have someone in their property to pay the mortgage, they can't afford to alienate renters by asking for mad rents as their's too much competition (remember supply and demand? Well there's a big over-supply situation in the rental market, thanks to TV programmes such as Property Ladder). Proof? My rent's just dropped by moving to an equivalent house in the same town, I'm saving £200 a month. And if you're already in a contract, a landlord can't put the rent up until it expires - at which point you just threaten to move.
3. Bloo Loo said...
When you go to rent a property, references, including bank ,are normally taken, so If you have been possessed for a mortgage default, then getting into rented is tricky. Looks like b and b is going to boom
4. Orwell said...
They can't. The LEaehold Valuation Tribuanal will assessa fair market rent based on variables throughout the locality, including Lo0cal Authority rents. And the Local Authority won't put their rents up .
5. Orwell said...
"Such borrowers will find it much more difficult than before to refinance onto cheaper new deals, as many sub-prime lenders have recently tightened criteria, withdrawn products and re-priced others by as much as 2.5%."
2.5% oh dear !
6. planning4acrash said...
Yes, also, people with a spare room in a family house will start letting them out to individuals to cover mortgage, and reposessed houses will be occupied again once sold. Rents will prob go up, but not as much as mortgages, me thinks.
7. stillthinking said...
When they start renting, probably, given the fact they are busted, they will live somewhere much smaller and cheaper. So perhaps the cheaper end of renting will get busy although more space is freed up overall.
That would be weird wouldn't it, everybody ending up squashed into little places while all the big nice houses stand empty.
8. C'mon Correction said...
Su - an increase in demand for rented housing will increase, whether it'll be enough to fill all the voids at present, we will have to wait and see. If landlords are able to push their rents higher then this will have an immediate effect on RPI and will push interest rates ever higher.
9. su said...
@stillthinking.
"all the big nice houses stand empty." Ooh! I'm starting to feel more optimistic now!
10. su said...
I do hope most of the repos are singlies - it's easier for them to rent. Or people in over-large luxury houses - they can downsize. Much harder if it's families in medium sized housing.
What is good news for us (e.g.higher interest rates and lower house prices) is bad news for others and vice versa.