'Housing boom over' as UK bank chaos grows

[CHIMO]

Source: The Observer

Britain's house price growth will be halved next year as the global financial crisis exacerbates the impact of rising mortgage rates, according to Nationwide, the biggest mortgage lender.

After the dramatic bail-out of high street bank Northern Rock underlined the impact of the American 'sub-prime' mortgage crisis on Britain's financial sector, Fionnuala Earley, Nationwide's group economist, said she expected house price inflation to slow to around 3 per cent next year.

Thousands of anxious customers queued outside Northern Rock branches for a second day yesterday, ignoring calls for calm from the Chancellor, Alistair Darling, and the bank's management, and sparking fears of a full-blown 'run' on the bank.

Speaking to Channel 4 News last night, Darling said he had been assured by the Financial Services Authority that Northern Rock was capable of meeting its financial obligations to its customers.

Read more: http://observer.guardian.co.uk/uk_news/story/0,,2170336,00.html

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Bank of Canada sees credit woes lingering

OTTAWA, Sept 12 (Reuters) - The global repricing of credit risk may take longer than in past episodes because of the lack of transparency and complexity of new instruments, Bank of Canada Governor David Dodge said on Wednesday.

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-09-12T114528Z_01_BAC000141_RTRIDST_0_BANK-OF-CANADA-SEES-CREDIT-WOES-LINGERING.XML

Looks like this will be a long drawn out affair until the errors are corrected.

[cliss]

1. I think they are completely out of their minds ~

"Britain's house price growth will be halved next year".

Looking at that statement: In other words, a house in London the value should have gone from 100,000 pounds to 160,000 pounds. But - since they're in aslump, the house will only go up to 130,000 pounds. Too bad, since they were all counting on a nice jump.

Yeah right.
And in the meantime, England is having a run on its banks. The US subprime mortgage is cratering, we haven't even seen the full fallout yet because it's yet to come.

(wish I could quote something from Shakespeare, but never mind).

[madrchsod]

3. i`ve seen people bidding on a gutted

rotting three story flat with 10/12 foot wide rooms that was finally sold for over 240,000 pounds-the country side is any cheaper

[rooboy]

7. Sydney is worse, believe it or not.... n/t

[muriel_volestrangler]

6. You've got a decimal point in the wrong place in your calculation

They're predicted house price inflation will be 3%, rather than 6%. That would mean a £100,000 house would go up to £103,000, rather than £106,000.

But I agree that actually having house price inflation about the same as other inflation would actually be a good thing. There are too many people in Britain who count on house prices going up to allow themselves to re-mortgage, and then spend the money that way. And prices have gone up ridiculously high anyway - a "house in London" would never be available for as little as £100,000. You'd be looking at more like £250,000, even in the least desirable parts.

[T_i_B]

8. Which in turn makes it very difficult indeed to get on the property ladder in the 1st place

.

[madrchsod]

2. prices of house in england makes american housing dirt cheap

watching all the bbc program for the last few years i find the price for housing over there is double what we would pay here. i read several years ago that england was having a problem with the housing prices distorting their economy and the pound against the euro..this might be what is going on now...a big correction in their housing pricing

[dipsydoodle]

5. Difficult to draw comparisons

between the UK and the USA. The UK will always have a a land sortage which doesn't exist where you are. The only real crash here was back in 1989/90 and that was for reasons which cannot duplicate - it followed the permanent removal of muli ownership mortages being allowed to claim tax relief on mortgage interest coinciding with very high interest rates of c. 15%.

[Sen. Walter Sobchak]

4. a liquidity crisis would be the best thing to ever happen in the housing market,

And by housing market I mean people buying homes to live in with their family.

The housing market is alot like military contracts, the cost will adjust to consume all the money on the table - combine this principle with the glut of money available to almost anybody with a pulse and you get people bidding up prices with the loaned money available to them.

If the endless supply of debt financing evaporates - prices will fall.

[sam sarrha]

9. thanks to the Bu$h family Mafia.. daddy did in the savings and loans, junior did in the other

competition of the banks.. this should be investigated for RICO violations.. hang the violators from lamp posts on Wall Street... they will think twice before they do this shit again