U.K. housing woes looming for British banks

01/22/2008 | Wall Street Journal, The

After months of grappling with financial shocks tied to the falling U.S. housing market, British banks are preparing to face a mortgage crisis at home. U.K. house prices are falling after tripling in the past decade. Heavily indebted homeowners will strain to meet mortgages as about 1.4 million adjust to higher levels this year. The higher risk of mortgage defaults, general economic slowdown, weakening commercial-property market and ongoing trouble accessing funds are leading some analysts to downgrade their forecasts for U.K. bank earnings.

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