Lunchtime news Friday 16 November 2023

Beleaguered bank, Northern Rock, is expected to receive as many as eight offers – some priced ‘aggressively low’ – to buy all or some of it, as the deadline closes today. The company has suggested that even if the bank was bought outright, the Bank of England may still need to bail it out to the tune of £6 billion until 2010. Virgin Group and JC Flowers are expected to bid for the whole bank, and ‘one or two banks’ from Europe and Asia are also understood to be putting in proposals.

Barclays Bank yesterday confirmed that they have been hit with £1.3 billion worth of debt as a result of the subprime mortgage crisis in the States. After rumours circulated last week that the debt could reach as high as £10 billion, Barclays brought forward their announcement. The amount was less than expected, but still equated to a write off of £500 million each month during July, August and September, and £800 million in October. Banks in America have written down almost $50 billion in the past month alone.

It’s all about banks today – a judge in America has prevented Deutsche Bank from repossessing 14 homes because they could not prove who owned the mortgages, in a move that could have massive repercussions for mortgage industry. The issue of ownership is difficult as banks and mortgage lenders pool hundreds or thousands of mortgages, placing them in one unit and selling parts of that unit on to other lenders. The industry-wide practice has been going on for years without challenge, and is worth $6,500 billion.

Details of the new Housing and Regeneration Bill have been announced by Yvette Cooper today in a bid to introduce more affordable and greener housing and give social tenants a ‘better deal’. Measures include a new watchdog for social tenants, called Oftenant; a Home and Communities Agency to deliver new housing, community facilities and infrastructure; encouragement for developers to make new homes as green as possible; and an easing of restrictions on councils to build more social houses.