Property - then and now

Conditions in the UK housing market seem to get tougher by the day. The latest data on home repossessions is pretty dire - the Times reports that “Home repossession orders are nearing the level last seen in the recession of the early 1990s after rising by 16 per cent in the first quarter of this year.” and a fresh cluster of announcements about higher mortgage costs and tightening lending criteria have come from various mortgage lenders. In the short run there is really not much that the government can do to prevent even higher levels of property repossessions (or foreclosures), one danger is that fire-sales of repossessed properties will increase the supply-demand balance and drive prices down even quicker that forecast.

I liked this piece from the Money Central section of the Times website which cast a glance back to the last time that the UK property sector was in deep doo daa - how different are the market conditions in 2008 compared to the early 1990s? A good read for students wanting some historical perspective to build into their exam answers.

Sub prime risks for the UK

We tend to think of the sub-prime mortgage crisis as being largely concentrated in the United States. But there is a growing body of evidence that some parts of the UK are also heavily exposed to the risks of a sub-prime crisis. The Financial Times today carries an interactive map which highlights those towns and cities thought to be most at threat from a rise in housing repossessions. According to research from FitchRatings, 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 - namely Newport, Wales; Cleveland, Teesside; Wolverhampton; Cardiff; Manchester; and Galashiels, Scotland.