Repossessions up at B&B

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by Gill Montia

Bradford & Bingley (B&B) has reported that the total number of its mortgages three months or more in arrears or in possession rose to 5.88% during the first half of 2009.

The proportion compares with 2.48% in the same period of 2008, although the buy-to-let lender adds that during the second quarter, arrears levels began to decline.

The figure has continued to ease throughout July, falling to 5.82% at the end of the month.

However, repossessions for the first half surged by almost 50%, to 961, compared to a year earlier and the trend is expected to continue for the remainder of the year.

Furthermore, the proportion of B&B’s mortgage book in negative equity stands at around 40% and the lender says it has made a provision of £270 million to cover fraud and professional negligence from applicants for its buy-to-let and self-cert loans.

B&B was taken into public ownership in September of last year, its retail deposit book having been sold to Santander, and is in the process of being wound down.

The group posted a pre-tax loss of £160.0 million during the six months to the end of June, compared with a loss of £26.7 million in the same period of 2008.

Taylor Wimpey leads London housebuilders higher

European equities markets were lower Friday as investors worried about new data on US consumer confidence which called into question how fast the economy will recover from the recession.

The Reuters/University of Michigan consumer confidence index was at 63.2 in August, down from 66 in July and below an expected rise to 68.5.

In London, the FTSE 100 was down 0.87 percent to 4,713.97 while the FTSE 250 managed to add 0.38 percent to 8,515.83.

Among homebuilders, Taylor Wimpey (LSE: TW) was up 6.7 percent on the 250 to lead the sector’s gains, while Barratt Developments (LSE: BDEV) gained 5.03 percent.

The FTSE Eurofirst 300 was down 0.88 percent to 940.21 while the CAC-40 fell 0.83 percent to 3,495.27, the IBEX was 1.31 percent lower to 10,901.9 and the Dax dropped 1.7 percent to 5,309.11.

Most markets in the Asia-Pacific sector were higher on the session.

The Nikkei 225 was 0.76 percent higher to 10,597.33 in Tokyo, while the Topix index added 0.53 percent to 973.57 but the Mothers market was down 0.72 percent to 466.87.

The Hang Seng added 0.15 percent to 20,893.33 while the Taiex was up 0.49 percent to 7,069.51 and in Australia the S&P/ASX200 was 0.57 percent higher to 4,461 and the Sydney Ordinaries gained 0.64 percent to 4,465.1.

The Straits Times Index was up 0.66 percent to 2,631.51 and the Kospi added 1.71 percent to 1,591.41.

Among decliners in the region, the Sensex was 0.69 percent lower to 15,411.63 while the Shanghai Composite dropped 2.98 percent to 3,046.97.

Disappointment over the new data on consumer confidence sent US markets lower in early afternoon trade as the Dow Jones Industrial Average fell 1.48 percent to 9,259.36, while at the same time the Nasdaq Composite was down 1.8 percent to 1,973.11 and the S&P 500 had dropped 1.54 percent to 997.09.

Crude oil, precious and base metals, and grains prices were all lower on the session.

The euro weakened on new data showing that consumer prices are down in Europe.

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Nationwide Building Society rescues block of condemned flats

The Nationwide Building Society has saved more than a dozen families in a block of condemned flats in Dodgeholme Court, Mixenden, Halifax.

The families were forced out of their homes as the block was condemned after fire officers were called in to inspect the building and told tenants they had to leave.

However, the Nationwide has told the Courier that it has written to tenants letting them know it plans to get the building into a habitable state, despite the responsibility for the upkeep of the building being with the block’s owners.

Charlotte Sjoberg told the Courier that the Nationwide was prepared to invest in the building, which would protect its financial interest and that of owner occupiers.

“We are also talking with the receivers to establish the situation for the owner-occupiers who find themselves in a situation where they are paying both rent and a mortgage“, said Ms Sjoberg.

“We hope to have a positive resolution to this situation soon,” she added.

Warnerlane Ltd, the company responsible for the upkeep of the block, has been charging a service fee for the upkeep but Nick Hancock, a receiver with accountancy firm UHY Hacker Young’s Manchester offices, said he was “horrified” by the condition of the communal areas.

However, on further investigation, it appears Warnerlane do not have the funds to improve the block.

Mr Hancock adds: “The Nationwide was not obliged to do what it did, the society has not taken possession of the block. “We are trying our best and feel dreadfully sorry for the people in there.”

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Nationwide Building Society rescues block of condemned flats

Permalink: Nationwide Building Society rescues block of condemned flats
by Kay Murchie

The Nationwide Building Society has saved more than a dozen families in a block of condemned flats in Dodgeholme Court, Mixenden, Halifax.

The families were forced out of their homes as the block was condemned after fire officers were called in to inspect the building and told tenants they had to leave.

However, the Nationwide has told the Courier that it has written to tenants letting them know it plans to get the building into a habitable state, despite the responsibility for the upkeep of the building being with the block’s owners.

Charlotte Sjoberg told the Courier that the Nationwide was prepared to invest in the building, which would protect its financial interest and that of owner occupiers.

“We are also talking with the receivers to establish the situation for the owner-occupiers who find themselves in a situation where they are paying both rent and a mortgage“, said Ms Sjoberg.

“We hope to have a positive resolution to this situation soon,” she added.

Warnerlane Ltd, the company responsible for the upkeep of the block, has been charging a service fee for the upkeep but Nick Hancock, a receiver with accountancy firm UHY Hacker Young’s Manchester offices, said he was “horrified” by the condition of the communal areas.

However, on further investigation, it appears Warnerlane do not have the funds to improve the block.

Mr Hancock adds: “The Nationwide was not obliged to do what it did, the society has not taken possession of the block. “We are trying our best and feel dreadfully sorry for the people in there.”

Burglary on the rise during recession

The number of burglaries is on the rise as the recession deepens, Halifax warned this week.

Home Office figures show a 4% increase in burglaries in the last quarter.

Halifax said householders should be careful to secure their homes even on hot summer days.

“When it’s warm outside people often leave windows and doors open to keep cool, but many don’t realise that burglaries often happen while homeowners are at home, as opportunist burglars reach in through open doors to grab whatever they can,” said Martyn Foulds, senior claims manager at Halifax.

“We’d recommend people close windows when they are not in the room and lock their front door when they are out in the back garden.”

A poll by the insurer found over a fifth (22%) of people don’t bother to lock doors and windows whilst they’re at home.

One in six (17%), meanwhile, do not have home contents insurance.

A poll by Norwich Union published earlier this year found games consoles and DVDs are the most popular items for burglars to steal.

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More homeowners offer room to lodgers

The number of homeowners letting out a room to a lodger has almost tripled in the last year, research from Abbey Mortgages has discovered.

Nearly one million UK households now include a lodger as homeowners seek to increase their income during the recession.

UK homeowners could potentially earn over £6 billion by letting out unused rooms, Abbey said.

London is the most popular location for letting out rooms to a lodger, with 6% of homes having a spare room rented out.

Offering space for a lodger is least popular in Northern Ireland and Scotland, where just one in 100 homes has taken in a tenant.

A significant proportion of homeowners offering space to a lodger are between 25 and 34 years old, with this age group making up a third of new live in landlords, separate research by Spareroom.co.uk found.

Nici Audhlam-Gardiner, director of Alliance & Leicester Mortgages, said: “If you have a spare room that’s gathering dust, its worth considering a lodger and earning £4,716 a year.

“Not only will you have some extra money each month but most of it could be tax-free too.”

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Credit card reward schemes dropping

The number of credit cards offering rewards to consumers has fallen by 11% in the past 12 months, research by Sainsbury’s Finance has discovered.

In 2008, 78% of credit cards on the market offered a rewards scheme.

This figure has now dropped to 11%.

The rewards on offer have also changed, Sainsbury’s found, with air miles and loyalty points replacing cashback deals and shopping vouchers.

Over half (54%) of customers are cashing in their credit cards rewards, compared with just 23% a year ago.

Credit card holders who fail to redeem their rewards say its because the financial incentive is too low, or the redemption process is too complicated.

“The recession has made a lot of people reassess their finances and it’s great to see that people are starting to make the most of the rewards on offer via their credit cards,” said Craig Hunter of Sainsbury’s Credit Cards.

“The credit card industry still has a lot of work to do however, as 46 per cent of people still say that they haven’t reclaimed the rewards they’ve earned in the past year, often because of their view of the scheme they have.

“There is no point offering reward schemes if there is no perceived value or if it is too difficult to redeem the rewards.”

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Family Investments launches cash bond ISA

Family Investments has teamed up with the Post Office to launch a new Guaranteed Capital Cash Bond ISA.

Launched this week, the ISA is available from Post Office branches and the Post Office website.

The ISA is the third financial package to be offered jointly by the two organisations in the last 12 months, following cash and equity ISAs launched in September 2008.

“This new ISA is just one of a number of developments we are working on with Post Office,” said John Reeve, Family Investments chief executive.

“Partnering with high street names such as Abbey, Barclays and Post Office has been very successful in driving our Child Trust Fund business and we believe the same approach will grow our ISA offering substantially.”

Last week the Post Office introduced its Overseas Property Money Transfer Service, offering customers the opportunity to fix their exchange rate for up to one year.

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Stock Market to crash again in 2009?

Bob Janjuah, chief credit strategist at RBS, is predicting that we’re heading for another stock market crash this autumn.

Before the bulls cry “doomsayer!”, let’s note that at a similar time last year Bob Janjuah successfully predicted the stock market crash for the autumn of 2008.

Coverage is highlighted by Ambrose Evans-Pritchard at the Telegrah: RBS uber-bear issues fresh alert on global stock markets:

The key indicators to watch are business spending on equipment (Capex), incomes, jobs, and profits. Only a “surge higher” in these gauges can justify current asset prices. Results that are merely “less bad” will not suffice.

He expects global stock markets to test their March lows, and probably worse. The slide could last three months. “A move to new lows is highly likely,” he said.

He certainly isn’t the only person to think so - Felix Zulauf and Nouriel Roubini are some of the more reliable and accurate commentators by public record who have long maintained the March rally is a bear rally.

Which is just plain common sense, really.

Anyone following chart trends will have seen stocks over sold and due a correction before March of this year - the big question was when it would happen.

But it was always underlined that any such correction would be a bear rally. Economic conditions could not support a true bull rally.

The astonishing observation is how many people were reportedly trying to claim otherwise in the investment press.

Unfortunately, popular media has been playing up the rally at every opportunity - reflecting on the gains as if they underscored economic recovery.

Economic reality, however, appears very different.

Here’s an insight for you - the Baltic Exchange Dry Index is declining fast again. Follow the preceding link and you’ll quickly notice that both the FTSE 100 and the Dow Jones Industrial Average follow the chart closely.

But note the key point - the stock market trend follows that of the Baltic exchange.

The Baltic exchange leads, the markets follow. And the Baltic exchange is plunging back down.

That means if the relationship continues to hold true, then we are looking at a significant downturn in the stock markets for the Autumn.

Of course, few serious investors will look at a single chart to determine their strategy. However, it does provide an interesting illustration to economic news that continues to come in.

While Germany and France in Europe are reportedly out of recession, and Hong Kong has also climbed out of it in Asia, the headlines do not scream “Economic recovery” but instead “W-shaped recovery!”.

If so, it means we’re due a lot more pain, and that this year’s bounce has been nothing but a repeat of events early in the Great Depression.

Granted, some degree of normality is returning - banks are recapitalising, helping to secure the financial sector against further shocks. But they are doing so by restricting lending, resulting in very limited consumer spending.

Commercial markets remain very restrictive, and while LIBOR rates are relatively stable, they preside over a diminished money supply by comparison to the proceeding years.

So at best, the UK, European, American and world economies are all quietly chugging along - greatly weakened, but not collapsed.

And yet, even in this diminished state new asset bubbles are already fast developing - especially the credit bubble in China.

A W-shaped recovery is looking increasingly likely - take care if you’re still holding on to equities.

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Hong Kong exits recession

Hong Kong has emerged from recession after the economy grew 3.3% in the second quarter.

The seasonally adjusted 3.3% compares with a revised contraction of 4.3% for the first quarter of the year.

The news follows that of Singapore, France and Germany, who have also emerged from recession.

Singapore’s economy grew an annualised 20.7% in the April to June period, while France and Germany economies grew by 0.3% in the second quarter.

Commenting on today’s figures from Hong Kong, Paul Tang, chief economist at Bank of East Asia, said: “The GDP data was much better than we expected, partly because the exports were better and partly because of a pick-up in private consumption.”

“Private consumption is being driven up by stock market gains and by the property sector, which started doing well,” added Mr Tang.

Private consumption in the period was up 4% compared with the first quarter. It is being fuelled by stock market gains and the property sector. The stock market has rebounded 80% in the last five months, while property prices are up 20% this year already.

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