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 monthly review of house prices provided by the Nationwide Building Society has shown another fall in house prices for June, though much less than it was in May.
House prices in June fell by less than one percent, compared with a drop of 2.5 percent in May. Although this is still a decrease in property prices it is at a much steadier rate which is an easier situation to deal with than the sharp drops seen before. The Nationwide Building Society chief economist noted that although the average house costs about GBP11,500 less than it did this time last year, compared with two years ago it is still 4 percent higher, and 9 percent higher when looking at a three year gap.
As the market stands then it is still in quite healthy shape for most homeowners who bought a couple of years ago or more and even then, as the Nationwide Building Society would point out, property is still an excellent investment over the longer term.
The Abbey National Intermediaries Division has just announced that it will be offering some exclusive mortgage deals for a number of selected partners.
The offers being provided by Abbey National vary from a low of 5.76 percent up to 5.81 percent, with at least a 50 percent deposit being needed for all the special mortgage deals available. A spokesman said that more offers like this would be released over time, dependent on the situation in the mortgage market at the time.
The Abbey National spokesman went on to say that this was a clear indication to the intermediary market that they are happy to lend money still and support for this important element of the mortgage market is very important to them.