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Realistbear

Nationwide: "reassessment Of Risk In The Housing Sector"

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http://news.scotsman.com/index.cfm?id=1263382007

Brown appeals for calm as £56bn is wiped off value of UK top firms
ALASTAIR JAMIESON
CONSUMER AFFAIRS CORRESPONDENT
NEARLY £56 billion was wiped off the value of leading British companies yesterday by a worldwide collapse in share prices which prompted Gordon Brown to appeal for calm.
...../
Fionnuala Earley, chief econo-mist at Nationwide, said: "These developments will cause some reassessment of risk in the housing sector. That could mean wholesale costs will increase and lenders may tighten up their own criteria." But she added: "If the Bank of England sees these current developments as a real threat to the City, further interest rate rises are less likely."

This is the most pessimistic statement so far from a VI. A reassessment of their ridiculous optimism in the face of a worldwide crash and severe credit crunch is very wise.

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"These developments will cause some reassessment of risk in the housing sector"

RE-assessment? I don't believe for one minute that anyone with an ounce of savvy was invited to the initial Risk Assessment..... if there ever was one! If a proper RA was done, I can't see how self-assessment and high multiples for loans ever got through the net and found to be an acceptable risk.

Edited by Dubai

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"These developments will cause some reassessment of risk in the housing sector"

RE-assessment? I don't believe for one minute that anyone with an ounce of savvy was invited to the initial Risk Assessment..... if there ever was one! If a proper RA was done, I can't see how self-assessment and high multiples for loans ever got through the net and found to be an acceptable risk.

Fitch recently conducted a risk assessment and, IIRC, they rated the UK among the top three risk-wise. Norway and France taking poll and second positions. That is the third most riskiest housing market in the world! I can't see too many banks putting out many risky loans in this current scenario.

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The same Fionnuala Earley, chief economist at Nationwide also said this in late 2005.

“While there is uncertainty about the economy at present we still expect the next move in interest rates will be down and that this is likely early in 2006. But while the market responded quite swiftly to the rate cut in August, we do not expect a cut to cause annual house price inflation to accelerate back up to levels seen in early 2005.”

So by my reckoning following the rate cuts in 2006 we should now be at 4.25% and the average house price should be £150K.

Cheif Economist my ar$e, bring in the next clown.

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Fitch recently conducted a risk assessment and, IIRC, they rated the UK among the top three risk-wise. Norway and France taking poll and second positions. That is the third most riskiest housing market in the world! I can't see too many banks putting out many risky loans in this current scenario.

I believe they said France was the most overpriced compared to average wages (which are lower than in the UK). Whether that is the same as "risky" is another matter. I would suggest that the UK market is riskier than the French because household debt is also much higher, it is easier to fire people and all French mortgages are fixed over the term.

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