Its those credit rating agencies again; with their recent downgrades of UK buildings socieites, they have thrown a spanner into the Bank of England's Special Liquidity Scheme. From today's Times:
THE Bank of England is locked in talks with seven British building societies to renegotiate crisis funding measures introduced at the height of the credit crunch. A slew of credit-rating downgrades for building societies last week threatens to breach the terms of the government’s Special Liquidity Scheme and force the societies to hand back cash to the Bank of England.
Such a move would reduce the amount of new lending they could make, dealing a blow to Whitehall plans to kick-start the housing market. Chelsea, Yorkshire, Skipton, Coventry, Newcastle, Norwich & Peterborough and Principality are the societies affected. All have recently passed stress tests imposed by the Financial Services Authority (FSA) and are not considered in danger of collapse. Nonetheless, they will now be charged more to use the emergency funding.
3 comments:
Credit rating agencies=criminal conspiracy.
Reduced lending is great news for me. I have saved for 10 years for a house and happy to see house prices keep falling for this reason.
@mike: Just curious - why would you want to buy an asset falling in value? Is it because you take it for granted that the price'll rise again in a few years, allowing you to gain from "money for nothing"?
Don't misunderstand me - I'm not having a go at you but it does make me wonder whether any sense will dawn at all, ever, in this country's property market.
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