Housing upturn looks a long way off

"A secure home for your money", Bradford & Bingley used to call itself. No longer, or not for shareholders, with the stock down over 90% within twelve months and hitting record lows 35% below the £400m emergency tin-rattle. At least the rights issue is underwritten, so B&B gets its cash, but it "has committed just about every mistake in the book, creating a sense of crisis", said The Independent's Jeremy Warner.

Now the lender faces increased funding costs as Moody's has cut its credit rating, noted the FT, and it "continues to suffer" from rising arrears in its mortgage portfolio. A 'run' on B&B is unlikely, as the Bank of England "has made it clear it will stand behind depositors", said Share Centre's Gavin Oldham. Still, it's hard to see any value in the shares, as Questor said in The Daily Telegraph.

If B&B goes into 'run off' closes to new business and gradually shrinks to nothing as The Daily Telegraph suggested, that means even fewer new house loans, and yet more woe for suffering housebuilders. Following dire statements from Persimmon and Taylor Wimpey, both Bovis and Redrow have announced hefty cuts in dividends, jobs and land bank values as "business decreased dramatically", said The Times. CEO Neil Fitzsimmons said consumers' lack of confidence is now "having a bigger impact on sales than difficulties in getting a mortgage". An upturn looks a long way away.

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