Are Brokers Set To Bail Out UK Housebuilders?
While the likes of Barratt Developments has been at the centre of much speculation about their financial position, the sector as a whole has seen a number of doom and gloom forecasts for the months ahead. While Barratt’s came forward to dismiss the rumours of a financial crisis, the company did not dismiss out of hand the fact that funding may be required to continue trading. So what is going on behind the scenes?
It now appears that the Barratt Developments and other housebuilders are in dialogue with brokers such as UBS and Credit Suisse with regard to a possible bailout fund for the sector. Much like the financial sector, if one of the major housebuilders was to hit financial difficulties this would have a knock on affect to the rest of the industry. Again, much like the financial sector, confidence is a major factor in the house building industry and if potential clients feel that their new homes may not be finished or they may lose out financially, we could see a further sharp reduction in transactions.
There are many similarities between the housebulding and the financial sectors as both have gone through a period of ‘over exuberance’ for which they are both now paying the price.
Share this..
Related stories
Migrant workers 'benefiting' economy
An influx of migrant workers has boosted the UK's economy, a new report published today has claimed.The study, published by the Trades Union Congress (TUC) dismisses claims that the arrival of immigrant workers has led to falling wages and fewer jobs for indigenous UK staff.Combating further accusations by critics on the far right, who claim that immigrants are acting as a drain on the welfare sta...
Read MoreHas George Osborne grasped the poisoned chalice?
If there was one member of David Cameron's close-knit team under pressure before and immediately after the election it was George Osborne who many believe is "not up to the job". He was ridiculed by the Labour Party on numerous occasions as various strategists pinpointed him as the potential weak link in the chain of would-be Conservative party Cabinet ministers. However, there is no doubt that Ge...
Read MoreLDV vans on the brink of administration
It has been revealed this evening that the future of LDV vans is literally hanging by a thread after a much vaunted management buyout apparently collapsed last night. The company has repeatedly asked the UK government for up to £5 million in bridging loans and has repeatedly been refused access to further funding despite the fact it employs a significant number of people in the UK. So what next?<...
Read MoreNorthern Rock and Bradford & Bingley merger
Northern Rock and the Bradford & Bingley will be merged together by the UK government in an attempt to increase the pace at which UK taxpayers can expect to receive repayment of the loans offered by the government during the credit crunch. In effect the two "bad banks" from Northern Rock and Bradford & Bingley, which contain potentially toxic mortgage arrangements, will be brought together under a...
Read MoreLloyds Bank finds massive loan risk on HBOS balance sheet
Lloyds Bank has this weekend revealed over £80 billion of high-risk loans on the HBOS balance sheet which it was not fully aware of. This comes at a time when Lloyds bank was forced to take a £10 billion hit for HBOS loan write-offs and a significant increase on its own more conservative balance sheet write-offs. So what next?
Overall Lloyds Bank has now located around £165 billi...