November 30, 2008
Buy back your building
Story link: Buy back your building
This puts HSBC in a slight predicement. The building is the headquarters they are working from, and the building was purchased from HSBC themselves. The problem comes that the money loaned to purchase the building, was taken out with HSBC as well.
The offer of £838million seems to be well above what the building is worth, but if the company sold to HSBC for any less, it would leave HSBC chasing them for the difference.
Metrovacesa, the troubled Spanish property company that bought HSBC’s European headquarters at Canary Wharf less than two years ago, wants the bank to take it back.
As the downturn in the Spanish property sector worsens, Metrovacesa has failed to refinance debt secured on the building. Now it has decided to offer the 45-storey tower back to HSBC for £838 million – £150 million less than the record-breaking £1.09 billion that the Spanish company paid for it at the peak of the British property market in April last year.
RBS show loss
Story link: RBS show loss
It could’ve been worse I suppose, the Government could’ve chose to support other causes. At least the shareholders still have 60% of their original investment to show, rather than 0.
Even so it will take a lot of restructuring and work to get the bank back on track.
The government’s new banking authority will start work on Monday by seeking three new board directors for Royal Bank of Scotland — now majority-owned by the taxpayer after the £20bn government bail-out.
Existing shareholders in RBS shunned the fundraising by what had been Britain’s second-biggest bank until the credit crunch struck last year, leaving the taxpayer with 57.9% of the bank - and a £2.4bn loss on the basis of the current share price.
Welsh homes are hit the hardest
Story link: Welsh homes are hit the hardest
Wales doesn’t tend to be in as high a demand as English based properties, so as the credit crunch takes its toll more and more, Welsh based property owners will see their equity decrease, and see their homes become a burden as they struggle to sell.
Welsh homes are hit the hardest
THE plummeting decline of the Welsh property market will not bottom out until 2010, experts warned last night.
The claim came as Government figures revealed prices in Wales have suffered the steepest year-on-year-decline in Britain. Figures published yesterday by the Land Registry have revealed house prices in Wales plummeted by an average of 12% over the last 12 months, a far steeper decline than the UK average of 10.1%.
Pre Budget Report – now what?
Story link: Pre Budget Report – now what?
Crosby is most certainly right. It’s a pretty simple formula if you ask me. You don’t lend, people don’t have the cash, people don’t spend.
If people aren’t spending then how can we expect the housing market to recover organically?
The Pre-Budget Report was supposed to improve the availability of mortgages. Instead it has merely exposed how many different views exist on how, or even whether, this crisis should be resolved - all scarcely helpful for anyone hoping to buy a home or remortgage, or who is wondering just how far prices will fall. Suddenly, Alistair Darling and the other individuals who have the power to make home loans more plentiful resemble nothing so much as pantomine villains, twirling their moustaches and shaking their fists, but with little real menace.
Empty homes, who to blame?
Story link: Empty homes, who to blame?
The fact is that there will always be a percentage of the total housing available, that will be empty, not a paticular good or bad thing. What it does allow in this current climate is Governments to use those empty homes to convert to affordable housing.
Empty homes are most likely the result of continuous building works, even through these tough times when individuals are not demanding such properties.
According to the Empty Homes Agency, there are 663,000 empty homes in England - enough to house almost two million people.
Chief Executive of the Agency, David Ireland, says: “The government is fixated on just building more homes, but we are convinced that returning more empty homes to use should be part of the solution too”.
As well as reducing the country’s housing stock, an empty home is bad news for a neighbourhood, attracting crime and reducing inhabitants’ enjoyment of their homes as well as affecting house prices.
Who will stay, who will go?
Story link: Who will stay, who will go?
Slightly unfair it may seem, especially if you are firm in need and your are discarded from the list, but necessary action needs to be taken to save the businesses and organizations that have the biggest impact on the UK and in particular, the UK economy.
Lord Mandelson is drawing up plans to choose which businesses and industries are important enough to be saved in the event of their going bankrupt as the recession bites, the Guardian can reveal.
In his first newspaper interview since returning to the cabinet, the business secretary said he planned a more interventionist policy for industry.
Job losses are the main agenda
Story link: Job losses are the main agenda
There is no doubt that next year will be almost certainly, ten times harder than 2008. Companies are realising what restrictions need to be made, and next year will be the year they will implement them.
Job losses are expected to be a regular headline in papers for at least another 6-8 months, until the recession takes hold of its self.
Job losses are the main agenda
The poster that won the 1979 general election was a fake. The “Labour isn’t working” dole queue was ac tually composed of 20 fully employed Hendon Conservatives, photo graphed by Saatchi & Saatchi. But there was nothing synthetic about the impact that the poster had on the Labour government of James Callaghan. Never again, Labour resolved, could the party afford to go to the country when the country was out of work. Yet that is what Gordon Brown risks doing, if you believe the spin about him delaying the next general election until 2010.
The Pound in trouble
Story link: The Pound in trouble
This could have huge implications for businesses who are trading or importing/exporting from the states, products from the states just don’t weigh in as cheap as they used to.
Long term predictions for a rocky ride and then a correction are most likely to be a fair bet, although it does depend on the success of pre budget report decisions
Could the British government’s plan to borrow and spend its way out of a recession lead to a run on the pound?
George Osborne, the Conservative Party’s spokesman on such matters, warned of just such an outcome this month, and Peter Mandelson, the Labor government’s business secretary, accused him of being “reckless and irresponsible.”
UK House Prices will keep falling
Story link: UK House Prices will keep falling
I don’t mind people predicting outcomes, but it’s like Shiller is making a statement, that he is right. Nobody can be certain about which way the housing market will go, but its not exactly hard to give a one way prediction, as there are enough facts to weigh off both routes.
UK House Prices will keep falling
Robert Shiller, the Yale economist who forecast both the bursting of the dotcom bubble and America’s property crash, is warning Britain’s homeowners to expect things to get every bit as bad on this side of the Atlantic.
In London to promote his new book, The Subprime Solution, Shiller told The Observer that consumers should be wary of the comforting excuses many analysts find for explaining why Britain’s housing market will be hit less hard than America’s, where prices have already fallen by more than a quarter, and repossessions are rife.
Premium Homes fall in value
Story link: Premium Homes fall in value
As I mentioned before, the real losers in the current economy are high end, premium sellers. This is anything from designer clothing, prestige cars, and of course the luxury home.
The supply and demand factor has a much bigger effect on a property of £1,000,000, than it does on a property that is just £200,000.
Luxury-home values in central London, the world’s most expensive location for prime real estate after Monaco, fell for an eighth month in November as fewer sellers held out over prices.
The estimated average value of a house or apartment in the city’s nine most expensive neighborhoods fell 3.6 percent from October, according to an index compiled by Knight Frank LLP. It was the second-largest drop since the index started in 1976. Property values declined 14 percent from a year earlier, the broker said today. The index covers homes mostly valued at more than 1 million pounds ($1.54 million).