Good News? Number of UK properties repossessed has fallen

Whether it is good news of bad remains debatable, as many people feel that under no circumstances people should be evicted from their homes, at least the numbers are decreasing. The Council of Mortgage Lenders announced on Friday that that the number of U.K. homes repossessed in the second quarter of 2009 fell to 11,400 compared to 12,700 in the first quarter.

The reason for the reduction in repossessions was attributed to increased Government pressure on lenders to show flexibility to families who had fallen behind in their mortgage payments because one or more breadwinners have been made redundant. In addition, the number of delinquencies on UK buy-to-let mortgages has fallen for the first time in two years, with borrowers apparently taking advantage of low interest rates to reduce their arrears.

Average delinquencies for UK prime buy-to-let mortgages fell for the first time in two years, l from 6.2 per cent in the first quarter to 6.1 per cent.The news that, while the UK remains deep in the throes of a recession while European neighbours France and Germany have officially announced an end to theirs, has not left Lord Mandelson wanting for words. Despite evidence to the contrary, the Business Secretary has insisted that Britain is not being left behind in recovery from the recession, and that the UK needed to “keep going” y until it saw an upturn.

He went on to add “ “The important point about this good news from Germany and France is that if they are now recovering this is good news for our manufacturers, our exports, because it will mean more orders for our companies in Britain.”

In a move that owes itself more to public relations and less to sound business sense, Britain has announced that they will be injecting a further £340 million pounds in the form of long term loans that will go towards the development of wings for Airbus SAS’s A350 model. In return the European corporation formed to build the super passenger jet will guarantee an 18 percent share of work on the project. The loan will guarantee the future of 1,200 jobs at the company’s U.K. factories.

Airbus announced recently that they are in immediate need of further finance to fund the purchase of jigs and machine tools as it begins production. The 300-seat A350 is scheduled to enter service in 2013.

France plans to contribute 1.4 billion Euros in A350 funding while Germany looks likely to provide 1.1 billion Euros, subject to receiving a commitment for more work on future Airbus planes.
In return for their continued support, France, will own 38 percent of Airbus, Germany 34 percent, and Spain who gets to make the tail will own 10 percent, of the company.
The U.K.’s largest insurance company ,Prudential Plc, announced on Friday that their first-half profit had fallen 7 percent to £129 million on turnover of £1.25 billion, considerably less than analysts’ expected, largely on the back of increased U.S. sales and climb in security values held by the company.

Shares in Prudential rose 11 percent, (51.2 pence to 529.5) the most in almost five months on the news that Prudential will raise their first-half dividend 5 percent to 6.29 pence a share. Aviva Plc and Legal & General Group Plc announced last week that they would be cutting their dividends as Britons continue to reduce their outlays on life insurance and pensions.

Another UK insurer, Old Mutual announced that they are looking to inject as much as £200 million into their U.S. life-insurance offshoot to strengthen their presence. On the news, their shares rose by 4.4 percent, (3.95 pence to 93.85).

PayPoint Plc, operators of the U.K.’s largest cash payment network declared that bill and general payment transactions are in line with its forecasts while mobile top-up volumes in the U.K., Romania and Ireland are lower than last year. On the news, their stock dropped 1.6 percent, to 531.5 pence.

U.K.-based travel company Thomas Cook Group PLC issued a profit warning for 2010, due to the ongoing downturn in the industry, after posting a widened loss in the last nine months. The company said that they are still liable to meet their targets for the current fiscal years despite the widened loss, but it won’t make the £480 million in earnings before interest and tax.

Music company Chrysalis Plc announced that their overall financial performance remained in line with the board’s forecasts, and the second half of the year had started well in music publishing. Despite their opposition, shares in the company dropped 0.4 percent to 67.75 pence Shares in Taylor Wimpey Plc, U.K.’s largest homebuilder advanced 1.75 pence, or 4.5 percent, to 40.29 pence after they were upgraded to “buy” from “hold” by the Royal Bank of Scotland Group Plc, On rumours that the company may attract a takeover offer from a group of foreign investor’s shares in British Land climbed 3.9 percent to 512.5 pence

Before winding down for the weekend, the FTSE 100 dropped 41.49, points to 4,713.97 making for a total loss of 0.4 percent for the week. The FTSE 250 climbed by 32.17 points on Friday to close on 8,515.83

Sterling had another mixed day on pre-weekend trading yesterday’s markets, ring slightly against the Euro while falling against the other major currencies.
Pound/US dollar 1.6444
Pound/Euro 1.1626
Pound/Japanese Yen 155.0566
Pound/Swiss Franc 1.7675

US banking group Colonial BancGroup closed their doors on Friday, and not just for the weekend, but forever. Colonial, a property lender based in Montgomery, Alabama, holding around $25 billion in assets, will be bought out of liquidation by BB&T, a North Carolina-based bank.

The total number of US bank failures for 2009 is now well over 70. On Wall Street, slurry of late buying saved the Dow Jones from recording their worst day in a month,
Worries about deflation added to poor consumer confidence and activity, leaving investors seeking safer assets than equities. Friday’s consumer price inflation figures, which showed the biggest year-on-year drop since 1949, saw inflation-sensitive sectors fall, with materials, industrial and energy stocks all doing badly. They were then joined by consumer discretionary shares after the University of Michigan’s consumer confidence index for August showed an unexpected drop.

The Dow Jones Industrial Average gave up 76.79 points to 9,321.40, making for a drop for the week of 0.5 percent, and NASDAQ fell 23.83 points to 1,985.52, finishing the week 0.7 per cent lower.

Hong Kong is the next industrial country to emerge from recession, after posting growth figures of 3.3% for the three months from April to June.
Hong Kong has reported negative growth for the last four consecutive quarters.

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Tags: Bank, Credit Crunch, Economy, Financial News, Money, Mortgage, Mortgages, negative equity, Repossessed, UK Banks