Is Bradford & Bingley safe?

tawse57

I have read that Bradford & Bingley have 40% to 50% of their mortgages in the buy to let market. With UK house prices now going South, and house prices in the US already having fallen by up to 50%, is B&B a safe place to have your savings?

Could they be the next NR? I hear that B&B is having to pay higher LIBOR rates to the money markets in order to get funding and that they only have funding until June or July? Apparently this is why they are offering higher IRs in order to get savers' deposits in?

Is B&B go under will the Government be able to bail them out like NR and guarantee savers' deposits?

EdInvestor

There´s no truth in any of this, which is probably being put about by hedge funds who make money out of selling the stock short.

Reestit_Mutton

tawse57 wrote: »

Is B&B a safe place to have your savings?

Could they be the next NR? I hear that B&B is having to pay higher LIBOR rates to the money markets in order to get funding and that they only have funding until June or July?

After NR, B&B and A&L are perceieved to be the most at risk of encountering problems if the current turmoil continues for any significant length of time.

However, that said, B&B also announced alongside their results today that they are now fully funded into 2009. i.e. unless they aggressively grow their mortgage business then they will have no need to tap the wholesale market for new funds until 2009.

Beyond that is anyone's guess as the "quality" of assets underwriting their money market loans may have deteriorated substantially by then making it difficult to roll any loans over as they mature.

HtH
RM

dunstonh

B&B sold a lot of their high risk lending a few months ago for over £2 billion. They have easily absorbed this write down into their profits.

No doubt the media will try and create a problem for B&B in the same way they made the NR situation worse.

tawse57

But if the UK housing market goes the same way as the US then surely B&B, with 40 percent plus mortgages being buy to let, will suffer big time?

With their share price tanking today does anyone think they might now be forced to raise IRs on savings in order to get deposits in?

Cozworth806

BB in their results stated that the average deposit on their properties is about 55%, so house prices would have to fall a very long way. The deposit on a BTL is about 25% so again there is a pretty good leeweigh.

MiserlyMartin

Where have these figures come from? The deposit on the BTL 25% I find hard to take in, whenyou consider the amount of amateur landlords about with each property financing the next, like a deck of cards about to all take each other down.

tawse57

Don't forget recent programmes like the recent Panorama which showed up somewhat dubious practices when it came to telling mortgage companies what the true value of a property is.