UK, Japan Subprime Woes [Housing Tracker]

Global Subprime Fallout

Subprime Losses Hit Japan.  “The Development Bank of Japan posted ¥33.8 billion ($318.4 million) in losses linked to the credit turmoil caused by the subprime crisis for the fiscal year ended in March. The government-owned lender said that the losses, stemming from securitized products owned by the bank and its subsidiaries, tripled from the ¥11.4B reported at the end of September. Net profit on a parent basis fell 28% to ¥53.9B from the year before.”  (Wall St. Journal, July 1^st)

UK: Mortgage Approvals Collapse.  “UK Telegraph: Britain is in the grip of a housing slump as bad as at any stage since the 1970s, property experts warned, as data suggested that first time buyers had all but disappeared from the market... Just 42,000 loans were handed out in May – down from 58,000 in April and a massive slump of 64% compared to this time a year ago, when 116,000 mortgages were given to home buyers. This is the lowest level recorded in any month since the Bank of England started collecting data in 1993.”  (Calculated Risk, July 1^st)

Taylor Wimpey to Issue New Shares Amid U.K. Property-Market Slump.  “Taylor Wimpey PLC, the U.K.'s second largest house-builder by market capitalization, said Monday it is looking to raise additional equity to help withstand "a significant downturn" in the U.K. property market… Unveiling £660 million ($1.32 billion) in planned write-downs on its U.K., U.S. and Spanish land banks and unfinished construction, TW said it has held discussions with shareholders and other institutions about issuing new shares… TW said it is… getting its lending banks to agree to relax the terms of its £1.9B revolving credit facility... At the moment, it remains within the terms of its banking covenants.”  (Wall St. Journal, June 30^th) 

Hadrian's Town Becomes ‘Slum’ as Subprime Infects North England.  “The north is home to Northern Rock Plc, the mortgage company bailed out last year by the government, and Bradford & Bingley Plc, the U.K.'s largest lender to landlords, which this month cut the price of a share sale. An average house in the northeast sold for £127,581 ($254,319) in May, the least among 10 regions of England, according to the Land Registry. What's more, prices fell 2.4% in the month, more than anywhere else.”  (Bloomberg, June 30^th)

 

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