Is the sudden plunge in values during October and November over? Schroders suggests that it might be, well, soon at least. That will not be enough to soothe those gripping the armrests on the Property Air flight to who knows where. There will have to be at least three months of level flight before anyone unbuckles and starts to talk to other passengers. And during that time there will be plenty of bumps following this fourth-quarter plunge.
But on the basis that soothing music might help, here are a couple of announcements that might set minds at ease. Banks such as Anglo Irish that kept lending simple, stupid, seem to be fine. A good set of results (p40) has been justified by the fact that it keeps its £15.1bn of loans on its own balance sheet: in other words, no fancy securitisation or commercial mortgage backed securities for the Irish. Oh no.
Smaller specialist property lenders and their brokers also seem to be doing fine (p49). Such is the nervousness in the markets, that some have been taking out adverts in EG to make the “we’re still lending” point. Carry on chaps.
The second announcement is that one very big bank – RBS – has decided that China is a safer place and that it will step up its lending to real estate investors and developers. Let’s not be discouraging. It may well be right. And it certainly beats dwelling on the UK loan book.
