UK housing market close to collapse, analyst says

Britain’s housing market is a “house of cards” that is set to implode after years of reckless mortgage lending, chronic oversupply of new flats and widespread fraud, a leading analyst said yesterday.

Robin Pagnamenta, The Times - 21st February 2008

“We believe it is payback time for years of speculation and sharp practice,” Alastair Stewart, of Dresdner Kleinwort Wasserstein, said in a note to clients issued at the start of British housebuilders’ results season.

The warning came amid rising fears of endemic fraud in the housing market. The Financial Services Authority (FSA) said yesterday that it had banned a further two mortgage brokers for submitting false applications to lenders, in what appears to be a growing trend.

The action – against two partners in a mortgage broking firm in Ilford, Essex – came after a speech last week by Philip Robinson, director of the FSA’s financial crime unit, in which he urged the housing industry to tackle the problem. He said dozens of lenders had contacted the FSA with 200 allegations of mortgage fraud and more were coming in every week - full article