Foreign Perspectives

Worryingly, the answer is probably “yes”.

In the last year the UK has had a series of high profile banks going bust (although they never used that phraseology). Just over a year ago the Northern Rock was taking around 20% of the entire UK mortgage market which is some doing for what was a fairly small building society not so long ago; not too many months later it was taken over by the government. Since then we’ve had Alliance & Leicester being bought by Santander, Halifax/Bank of Scotland being rescued by LloydsTSB (ironically one of the more logical takeovers given the history of both banks) and just this weekend Bradford & Bingley joins the Northern Rock in public ownership. That’s just the big players too as numerous smaller outfits have disappeared in the past year with the Nationwide alone sweeping up the Portman, Cheshire and Derbyshire and no doubt others have gone by the wayside with a less public profile.

Thus the business of obtaining mortgage quotes is becoming both simpler and more complex. Simpler in the sense that there are fewer outlets around these days but more complex in that the criteria for granting a mortgage have become somewhat stricter: after all, when the banks themselves are going broke and tightening their belts they need to do the same to potential customers.

How could it possibly get worse though? Well, to date we’ve “only” had banks in the lower end of the top 5 or 10 going bankrupt thus it’s possible for LloydsTSB to sweep up the Halifax and JP Morgan to absorb a string of smaller banks in the past year. What would happen if some of those at the top end of the range went to the wall though? Who could take over the likes of Citibank or HSBC?

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