FT: sub-prime a bigger concern for Britain then previously thought

WTF?_2

http://www.ft.com/cms/s/0/eba43318-0d83-11dd-b90a-0000779fd2ac,dwp_uuid=d355f29c-d238-11db-a7c0-000b5df10621.html

(you might need to register to read this link, it's free to do so though)

Mortgages made to subprime borrowers – home owners with a shaky credit history – account for 10 to 11 per cent of all private homes in six UK towns, data from FitchRatings show.

The towns are: Newport, Wales; Cleveland, Teesside; Wolverhampton; Cardiff; Manchester; and Galashiels, Scotland.
..
Separately, economists at Citi on Friday forecast a 15 per cent fall in UK house prices by the end of 2009.

So much for the worst victims of HPI being in the South - plenty up North going to be affected too it seems.

So Citi are now saying publicly that they see prices down by 15% at end of next year. I wonder what their private forecasts are?

mystic_trev

chucky wrote: »

let's get this into context - 15% in two years isn't really a crash.

NO -but the figures over 20% once you've added inflation to the figures!

Guy_Montag

15% is sod all since we're already 5% off the peak last year & dropping. I'd say YoY we'll be 10% by the end of 2008.

£50bn isn't going to help much, the banks are returning to lending normality not over-tightening.

m00m00

the banks have lost billions and billions

does anyone really think they are in a rush to do exactly the same thing again, even if they could ?

kennyboy66_2

chucky wrote: »

let's get this into context - 15% in two years isn't really a crash.
it's a correction that will happen over the next two years - NOT A RECESSION AS YOU SEEM TO TRY TO IMPLY.

Also. 'Mortgages made to subprime borrowers – home owners with a shaky credit history' how much of the UK market does this cover?

J K Galbraith said that he should have actually titled his 1954 book The Great Correction rather than The Great Crash.

Semantics don't really matter when you are trapped in negative equity and are a forced seller.

m00m00

the banks that have made money, have made it by shorting on the other banks, and very much NOT from mortgage lending.

if the money lost is so easily tax deductible etc, why are none of them admitting exactly how much they have lost ?

and why are we still hearing of massive losses being reported ?

no matter how much the most panglossian of commentators wants, things really are different this time, and not in the way the bulls want.

kennyboy66_2

Ladbrokes are betting 5/6 that prices will fall by 10% this year based on the Halifax HBOS Standardised Quarterly Average House Price.

I'm hoping we will be more than 1/2 way there by the time of the Q2 survey.

WTF?_2

chucky wrote: »

m00m00 - you're right but take my below points into consideration when you do say that.

the banks have lost millions, there are also other banks who have made billions and billions out of this...

So far, sub-prime writedowns are at something like > $200 billion (total losses could be up to $1 trillion according to IMF estimates).

If you can show that other banks have made an extra 200 billion dollars recently I think the markets would all be very interested.

The facts are that most of the sub prime losses represent real 'lost' money to the banks. Either through defaulted debts or assets that are not worth what they booked them as. This has a very direct impact on their balance sheet and is why governments are frantically doing everything they can to bail them out with taxpayer cash.

JonnyBravo

kennyboy66 wrote: »

Ladbrokes are betting 5/6 that prices will fall by 10% this year based on the Halifax HBOS Standardised Quarterly Average House Price.

I'm hoping we will be more than 1/2 way there by the time of the Q2 survey.

Thanks for that. Am having a slice of that!

taffr

EmmaH warned you back in April 2006....people didnt listen then and looks like you 'brokers' who were selling sub prime morgages [and advising on this site] and making a few bucks out of selling this crap didnt like what she said....and had her thrown off the site....

shame on you all.

http://forums.moneysavingexpert.com/showthread.html?t=186002&highlight=redstone

Look at all her post...genius, kind, respectful, warning and forward thinking!

Taff R

pickles110564

mystic_trev wrote: »

NO -but the figures over 20% once you've added inflation to the figures!

20% aint enough in our area to get FTB's on the ladder but at that amount several BTL's I know will be increasing their stock.