Half year results from the Alliance and Leicester have shown profits at just GBP2 million, down from GBP290 million for the same time last year.
The biggest reason for this massive fall is the writedown of assets that the Alliance and Leicester carried out. This was done because of the worldwide credit crunch that has sent their asset values fall. The good news is that the market had been pre-warned about the write down so, even though it was a little more than was expected, industry experts were not too surprised.
Although investments have proved a difficult area for the Alliance and Leicester their mortgage business appears to be stable as do both personal and business banking. Numbers of mortgages provided are down but the quality is still good meaning bad debts are unlikely to cut into the bottom line.
The current state of the housing market means that most home improvements are not adding any more to the asking price than they cost said the Abbey National.
A home extension can leave someone selling the property around GBP20,000 out of pocket if they were to sell straight after getting the work done, while a new conservatory or kitchen can easily leave them down by GBP14,000. The only home improvements the Abbey National feel are worth doing for those selling a property are the cosmetic ones such as decorating.
The key to home improvements then is to undertake them only if the plan is to stay in the property. This way they become a real benefit to the homeowner said an Abbey National spokesperson. It is understood that well over 8 million people will be improving their homes in the coming year which may prove a revealing statistic in what is a dormant market.
Abbey National mortgage customers facing difficulties on the back of the credit crunch are being asked to consider taking in lodgers to make ends meet.
Across the country there are currently over 18 million households with an unused bedroom that could be offered out for rent. The average rental price paid for a bedroom in a house is just under GBP290 per month according the Abbey National figures and represents extra money that the homeowner could find very useful.
Anyone considering this option should ensure the terms of the mortgage are not being breached in any way and also that any insurance cover is still valid for the homeowners property. Abbey National expect there to be few problems but ask homeowners to check before going ahead.
