Tuesday, Mar 18, 2008
Bear Stearns' collapse means you can't get a mortgage
MoneyWeek: Why Bear Stearns' collapse means you can't get a mortgage
The collapse of Bear Stearns had a predictable impact on stock markets across the world yesterday. But few suffered as badly as the UK market - British banks took a pounding once again. The Bank of England auctioned off £5bn of short-term loans yesterday, but banks requested almost five times that amount. The move came as the inter-bank lending rate spiked up to 5.59%, in the largest rise in three months.
Meanwhile, mortgage rate increases and product withdrawals make a mockery of all the feeble articles being printed in the weekend property supplements about ‘a spring recovery’ in the property market.
Banks in the UK are already suffering. What will happen when the UK housing crash gets fully underway?
Posted by damien @ 10:54 AM (1010 views) Add Comment
9 Comments
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1. mark wadsworth said...
"What will happen when the UK housing crash gets fully underway?"
Er .... house prices will go down?
2. plato said...
Caravan prices will rocket.
3. titaniccaptain said...
Actually Plato Caravan prices probably will rocket.......and as crazy as it sounds a caravan section in someones portfolio wouldnt be so dumb
4. Landedgentry said...
Most BTL's will end up in caravans.
5. titaniccaptain said...
Seriously though guys its quite a good point they literaly will have nowhere to go. Landedgentry prehaps wont just of inherited the sub prime crisis from the u.s. but also trailer parks
6. titaniccaptain said...
oops should of read ......Landedgentry prehaps "we" wont just of inherited the sub prime crisis from the u.s. but also trailer parks
7. Scouser said...
Warren Buffett bought in to the US mobile home sector in 2003/2004. He bought Clayton Homes & Oakwood.
....... he anticipated that the US property market was heading for trouble.
http://www.fastcompany.com/magazine/78/claytonhomes.html
8. Landedgentry said...
titaniccaptain.... thats ok bwoy!! LOL
9. Greytornado said...
Much of the problem seems to be caused by a failure to regulate the mortgage market, property, (which is just a comodity) is very over valued, lenders have thrown caution to the wind and millions have used paper values to raid their paper equity and use their houses like piggy banks. Most problems in life are usually solved by tackling the cause. Reducing interest rates might make life easier for Brown & Co (who are acting like Labour Governments usually do and borrowing on a reckless scale), but that will do nothing to solve this crisis, because it wasn't caused by high interest rates in the first place. Part of the cure is a drastic re-valuation of the housing stock of the UK - probably downwards by about a third, - the pain yet to come is huge. The effects will be seismic for the millions affected, and it will probably wipe out the Labour Party for a quarter of a century. This viewpoint may seem extreme, but I can't see how it cannot happen.