

Fears For UK Lenders
British banks have made headlines this week over fears that US sub-prime lending could affect their profits.
Figures for late payments and home repossessions in the US market rose to record levels last month, raising concerns about the level of lending from sub-prime providers.
This coincided with reports that New Century, one of America's biggest financial institutions, could be on the verge of going bust.
Though the problem's epicentre was across the Atlantic, the effect of the fallout has been experienced on British shores, with HSBC having already taken a $10.6 billion charge against its sub-prime mortgage business.
The rising bad debt provisions held by the institution led to its US executive being forced to leave the firm.
And despite recent reports that HSBC's profits have now risen, the bank states that external factors such as economic conditions, the housing market and the availability of refinancing options for sub-prime borrowers could all affect the mortgage sector in coming months.
Barclays Bank is also in the spotlight, since New Century states that it has received a notice of default from the bank relating to some of its loans.
However, Barclays is keen to deny any link with the New Century, which the BBC reports has had its shares suspended following concerns raised about its financial position.
A statement from Barclays read: "All of our exposure to US sub-prime lending is fully collateralised pending securitisation.
"We do not envisage any material losses due to exposure to the sector."
Experts are keen to follow Barclays' line, with Merill Lynch stating that the number of sub-prime lenders in the UK is much smaller than that in the US.
Furthermore, the Independent reports that about half of UK sub-prime lenders are described as "low adverse", meaning that they do not have a history of serious payment problems.
Additionally, house prices are falling in the US in comparison with the value of property in this country, which means that a number of homeowners are currently stuck in negative equity.
This contrasts with the current house price situation in this country where property is rising in value and first-time buyers are unable to ascend the housing ladder.
Jeremy Claridge, head of specialist mortgages at Alliance and Leicester, commented: "Structurally, the UK and US are two very different markets.
"Lenders in the UK are naturally quite cautious and prudent in the way they actually go about lending, such as limits on maximum advances and affordability tests.
"In the UK, there is also a predominance of fixed-rate deals which give longer periods of stability and certainty on payments."
The news comes as reports from the Royal Institution of Chartered Surveyors suggest that the UK housing market has yet to experience repercussions from events in the US market.
While price inflation was at the weakest rate in the last nine months, it is still at a higher rate than at the same time last year.