I hate using this old cliche but there has been a "tidal wave" of bad property market news in the last week or so.
So, for the benefit of anyone out there suffering from housing crash denial, here are a few things to meditate on this Sunday.
Mortgage approvals down 37 percent
UK housing market may have its supply problems, but " no mortgages equals no demand". In October, mortgage approvals fell off a cliff. Meanwhile, the Royal Institution of Chartered Surveyors says inquiries from new buyers have fallen for five months in a row. Or to put it another way, buyers are disappearing. This, more than anything else, will burst the bubble.
No end in sight for Northern Rock
Depositors keep withdrawing their cash, while the Bank of England keeps covering the shortfall. There are a couple of potential offers to buy on the table. However, none of these offers look that attractive. Meanwhile, 10,000 Northern Rock customers are a month or more behind on their mortgages, on loans worth nearly £1.2bn. At the end of 2003, there were only 2,500 in the same sorry position, holding mortgages worth just £168.8m.
Who owns Northern Rock's mortgages?
The Guardian had a quick look at Northern Rock's books and found that £53 bn of mortgages - over 70% of its mortgage portfolio - is not owned by the beleaguered bank, but by a separate offshore company.
Paragon could be following Northern Rock
The buy-to-let financier appears to be running out of cash. It has asked its share holders to dig into their collective pockets and finance at £280 million rights issue to fund day-to-day operations. It has also been forced to sell its stock of car loans. It has also halved the amount of new lending.
One of Britain's largest sub prime operators - Kensington - has woken up to the inherent riskiness of lending to people with poor credit. It has withdrawn its range of sub prime mortgages and also made it more difficult for amateur speculators to get financing for buy-to-let. Laughably, the company blamed a lack of interest from investors for financing such worthy operations.
Bradford & Bingley
Life is getting more difficult, even for those banks who actually bother to take deposits, rather than rely on the wholesale lending market. Bradford & Bingley sold £4.4 billion of high quality assets below face value. However, the sale may only offer temporary respite. The bank may need to cover up to £5.7 billion of maturing wholesale loans in the coming three months. It is a problem that has some frighteningly similar parallels to the funding issues that brought Northern Rock down during the summer.
Alliance and Leicester
While the City of London might be a little worried about the Bradford & Bingley, it has nightmares about the Alliance & Leicester. Although the A&L has the option of selling some of its assets, the bank lacks a certain something in terms of asset quality.
Allied Irish Bank failed to find investors for a €3bn bond
This week, AIB fell foul of the credit crunch. It was unable to issue a €3bn benchmark asset-covered bond. The news sent AIB's stock down 3.2 percent. Meanwhile, Irish property prices are down almost 5 percent compared to a year ago.
ECB provides more emergency cash to the money market
On Friday night, the European Central Bank pumped in fresh emergency cash into the European banking system. The ECB didn't say how much it pumped in; the amounts will become clear in the coming days. However, it said that it pumped the money in because of “re-emerging tensions”.