Issue 1 – January 2008

The effect of the Sub-Prime Mortgage Defaults in the US Housing Market

The chickens well and truly came home to roost on this about half way through 2007 and, after the dust had settled, perhaps the most surprising aspect was the hallowed status of the financial institutions among the first to be caught out. Northern Rock’s difficulties still make the headlines and remain an all too vivid reminder of the financial carnage that started last summer.

The reverberations of the “credit crunch” are still resounding around the world and the extent of the default and exposure of the banks and investors is not yet fully apparent. Until such time as it is and investors regain confidence, credit is likely to be both expensive and difficult to find and this has obvious implications for the commercial (and residential) real estate market in the UK.

For some, of course, the current situation is not a reason for despondency at all, but an excellent buying opportunity.