The head of Barratt Developments, Britain's second most valuable housebuilder, gave warning yesterday that the decline in the housing market would continue into the new year as he revealed that sales of his own company's new homes have fallen by 14% since the summer, reports The Times.
Mark Clare, the chief executive, said that his company’s sales volumes would most likely end 17% down for its second half, ending on New Year’s Eve, compared with last year.
He expects prices to stagnate, with zero growth during 2008.
Sales reservations for new homes would continue to fall if, as expected, the debt markets continue to make it hard for lenders to offer the sort of cheap mortgage deals that house-hunters had become used to over the past few years, Mr Clare said.
SWISS RE, THE WORLD’S BIGGEST reinsurer, became the latest victim of the sub-prime meltdown yesterday as it announced a SFr1.2bn (£525m) loss on two credit default swaps, reports The Independent.
Shares of the world's biggest reinsurer dropped more than 10% on the news, which weighed on the European insurance sector.
The insurer sold the complex credit instruments to clients seeking to protect themselves against falls in mortgage-backed investments.
The investment portfolios the insurance was sold for included collateralised debt obligations (CDOs), which are bundles of bonds of differing quality and include securities backed by mortgages.
The value of CDOs collapsed after mortgage defaults rocketed in the US. “We clearly made some poor choices,” said Roger Ferguson, the head of Swiss Re's financial services business.
PRIVATE EQUITY FIRMS YESTERDAY failed to head off accusations of excessive secrecy and profiteering after an industry-funded report called for buyout chiefs to abide by a voluntary code, reports The Guardian.
Sir David Walker, the City grandee who wrote the report, said the private equity industry must open itself up to wider scrutiny and supply more detailed information about how it finances deals to combat criticism that it acted against the public interest.
He was immediately criticised by trade unions, who said a voluntary code was inadequate and that the government should consider statutory rules to bring firms into line with public companies.
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Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till