UK property black hole threatens banks' lending

[AtW]

Britain is at risk of a mass sell-off of distressed properties that would send values into a double dip and impair the lending ability of banks.

In the report, the Bank revealed its concerns about potential writedowns on £200bn of loans made to commercial property by major UK banks. It warned of an increasing number of loan defaults given the 44pc fall in the value of shops, offices and warehouses since 2007.

However, the Bank also described how the approach of the lenders to withdrawing from the property sector could jeopardise the economy's recovery. Their exposures are almost six times greater than in the 1990s recession.

Lenders may be forced into selling a wave of properties as the stock of repossessed assets grows, according to the Bank. This could disrupt the supply-and-demand balance and place "significant downward pressure" on recovering property values.

"That would reduce banks' recovery rates and could potentially prompt other banks to sell their assets, leading to further falls in property values," the Bank says in the report.

More
here.

[Diver]

Have we all got cash ready for the big sell off?

More BTL's to rent out to the newly homeless.

Can somebody let Kerry Katona know?

She's being evicted from her lavish home and lifestyle shortly

http://www.digitalspy.co.uk/showbiz/...-new-year.html

[AtW]

Kerry who?

[threaded]

Commercial property prices, rents and taxes in the UK is an utter scandal. Small wonder it's charity and tat shops that are filling the vacant plots.

[Diver]

Kerry who?

Ex Atomic Kitten star. In all the Iceland adverts on TV until recently.

The Official receiver/finance managers have apparently been giving her an extra £8,000 a month to pay her mortgages, but she hasn't paid the mortgage in months, she just wasted the money on lavish living.

No sympathy whatsoever if that's the case.

[Gonzo]

Ex Atomic Kitten star. In all the Iceland adverts on TV until recently.

The Official receiver/finance managers have apparently been giving her an extra £8,000 a month to pay her mortgages, but she hasn't paid the mortgage in months, she just wasted the money on lavish living.

No sympathy whatsoever if that's the case.

She's being forced to move out of Wilmslow.

There's a bright side for her to look upon.

[Diver]

She's being forced to move out of Wilmslow.

There's a bright side for her to look upon.

Remember Wilmslow's annoying neighbours?

You don't think

[Wilmslow]

Remember Wilmslow's annoying neighbours?

You don't think

I know exactly where she lives - actually not very far from me, just the other side of the common!

[Diver]

I know exactly where she lives - actually not very far from me, just the other side of the common!

Common being the operative

[Paddy]

Commercial property prices, rents and taxes in the UK is an utter scandal. Small wonder it's charity and tat shops that are filling the vacant plots.

The problem is that commercial rents are based on the highest rent of surrounding businesses. As an example my cousin’s coffee shop rent was £22k. Starbucks opened nearby and they accepted a rent of £42k. At the time of rent review a new rental value by an independent survey valued my cousin’s shop at £35k. The rent was too high so his business fails. Meanwhile Starbucks pulls out and the new tenant for my cousin’s shop pays a lower rent £22k.

Rent values are not free market, they are manipulated. Landlords usually have multiple properties in the same area and they will even let to themselves at a high rent to push up the value. Landlords will prefer to keep a shop empty rather that letting out at a lower rent because the lower rent will affect the renal values of their other properties.

Rates are based on renal values therefore once rent goes up so does local rates.