Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

Banks Stock May Suffer Due To Collapsing Btl

Recommended Posts

Big City Fund Manager warns banks that wobbling BTL market may bring grief:

http://www.ifaonline.co.uk/public/showPage.html?page=314012

BTL threat to banking profits

Friday 3rd February 2006: 11:00
By Julie Henderson
Fund manager George Luckraft is predicting there could be an imminent rise in the number of unsold or vacant buy-to-let properties, which will in turn make banking stocks less attractive as an investment.
...the housing market could yet see a “wobble” created by
overcapacity of buy-to-let
properties and alongside a rise in the number of bad debts, and this could in turn affect the profitability of UK banks.
...banks could begin to feel the pressure of buy-to-let lending as he predicts there will be an increase in the number of ‘off-plan’ property deals which go uncompleted by the original buyer, as well as an
increase in the number of properties which fail to make sufficient rental revenue.
His focus on BTL investments was part of a wider presentation which reveals the
Framlington UK equity income fund may reduce its 12% portfolio holding of banking stocks
, as Luckraft anticipates there will also be a rise in personal bankruptcies alongside potential lending defaults by private equity investments.

Share this post


Link to post
Share on other sites

No surprise here. Used to be loans marketing manager for one of the big guns in the mid 90's. Some of the lending thats been going on in the last few years has made my eyes water. What goes around comes around. I think the story will be in the financial institutions that are off the high street who will struggle to weather the approaching storm (saw a thread a few weeks ago with an article on sub prime lending that would be interesting to link to this thread if anyone can remember it)

Share this post


Link to post
Share on other sites
Guest muttley

No surprise here. Used to be loans marketing manager for one of the big guns in the mid 90's. Some of the lending thats been going on in the last few years has made my eyes water. What goes around comes around. I think the story will be in the financial institutions that are off the high street who will struggle to weather the approaching storm (saw a thread a few weeks ago with an article on sub prime lending that would be interesting to link to this thread if anyone can remember it)

I agree with this.Sure the big banks will suffer losses if the economy goes pear-shaped,but this is countered by the huge profits made in the UK from record high mortgages,and MEW.

High St Bank Stock are undervalued IMHO.

Share this post


Link to post
Share on other sites

I agree with this.Sure the big banks will suffer losses if the economy goes pear-shaped,but this is countered by the huge profits made in the UK from record high mortgages,and MEW.

High St Bank Stock are undervalued IMHO.

Some banks are more exposed than others to the faltering BTL market it seems. Building Societies must be in much worse shape? All this negative news on BTLs may spook the market and cause a dash to sell quicker than HPC'ers anticipated. The not so EW came in December:

http://portal.telegraph.co.uk/property/mai...7/ixptop12.html

Share this post


Link to post
Share on other sites

Sure, banking stocks were really hurt in the last housing crash NOT.

How do you think LLOY did from 1/1/1988 through to 1/1/1996?

It went from around 70p through to around 330p - in other words it went up FOUR AND A HALF TIMES in value.

If there's another housing crash I wouldn't be surprised if by the end of it LLOY was trading at £15+.

Share this post


Link to post
Share on other sites

Sure, banking stocks were really hurt in the last housing crash NOT.

How do you think LLOY did from 1/1/1988 through to 1/1/1996?

It went from around 70p through to around 330p - in other words it went up FOUR AND A HALF TIMES in value.

If there's another housing crash I wouldn't be surprised if by the end of it LLOY was trading at £15+.

How much did BTL play in the Great Crash (the 1989-96 one)?

Share this post


Link to post
Share on other sites

As I understand it, the last crash was caused by a mixture of recession and high interest rates. This crash will, I think be affected by BTL and a generally overbought market. In both crashes people are over-extended, given current circumstances. In my opinion the end result will be pretty similar. I don't hold any bank shares, but personally be happier holding LLOY on margin that UK property on margin.

Share this post


Link to post
Share on other sites

the real carnage will be in the MBS CDS and CDO markets, hedge funds and institutions left holding these things are going to hurt. financial toxic waste as some one once said.

Share this post


Link to post
Share on other sites

Sure, banking stocks were really hurt in the last housing crash NOT.

How do you think LLOY did from 1/1/1988 through to 1/1/1996?

It went from around 70p through to around 330p - in other words it went up FOUR AND A HALF TIMES in value.

If there's another housing crash I wouldn't be surprised if by the end of it LLOY was trading at £15+.

Yep. Personally I think banks are evil parasitic entities and we should be kicking them while they are down. They know the crash is coming and they are planning for it - but it won't be them but mug punters that suffer from their marketing excesses unless something unforetold that they can't control happens. Hence Cut the Card - The Coolest Cut (the new anti-credit campaign) :ph34r:

Share this post


Link to post
Share on other sites

I agree with this.Sure the big banks will suffer losses if the economy goes pear-shaped,but this is countered by the huge profits made in the UK from record high mortgages,and MEW.

High St Bank Stock are undervalued IMHO.

depends how much overseas exposure they have.RBS and HSBC will probably fare a bit better than the likes of northern rock/A+L(...but get ready to poach them early next year as they will probably be m+a targets)

Share this post


Link to post
Share on other sites

the real carnage will be in the MBS CDS and CDO markets, hedge funds and institutions left holding these things are going to hurt. financial toxic waste as some one once said.

Indeed, and guess who holds most of the mortgage backed instruments? Private pension funds are going to be royally rodgered yet again, on a scale never seen before.

How I love the way the FSA knows peoples' business better than the companies themselves, what a wonderful day it was when they decided they should all dump 'risky' equities at market lows and get into the cosy bond market.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.