Details

Property Boom and Banking Bust


Property Boom and Banking Bust

The Role of Commercial Lending in the Bankruptcy of Banks
1. Aufl.

von: Colin Jones, Stewart Cowe, Edward Trevillion

75,99 €

Verlag: Wiley-Blackwell
Format: PDF
Veröffentl.: 08.11.2017
ISBN/EAN: 9781119219200
Sprache: englisch
Anzahl Seiten: 216

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Beschreibungen

A fascinating analysis of the critical role commercial property investment played in the economic boom and bust during the global financial crisis The unprecedented financial boom stretching from the mid-1990s through 2008 ultimately led to the deepest recession in modern times and one of the slowest economic recoveries in history. It also resulted in the emergence of the draconian austerity policies that have swept across Europe in recent years. Property Boom and Banking Bust offers an expert insight into the complex property market dynamics that contributed to the Great Financial Crisis of 2008 and its devastating economic consequences. It is the first book to focus on a woefully underreported dimension of the crisis, namely, the significant role that lending on commercial property development played in the crisis. Among other key topics, the authors explore the philosophical and behavioral factors that propelled irresponsible bank lending and the property boom; how it led to the downfall of the banks; the impact of the credit crunch on the real estate industry generally in the wake of the financial crisis; the catastrophic effects the property bust had on property investors, both large and small; and how the financial institutions have sought to recover in the wake of the financial crisis.  Provides valuable insights into what happened in previous booms and busts, particularly in the 1970s and 1980s, and how they compare with the most recent one Offers an expert assessment of the consequences of the global financial crisis for the banking system and the commercial property industry Examines strategies banks have used to recover their positions and manage the overhang of indebtedness and bad property assets Addresses strategies the real estate industry have used to recover from the collapse in property values Written in an accessible style, and featuring numerous insider case accounts from property bankers, Property Boom and Banking Bust disentangles the complex, tightly-woven factors that led to the Great Financial Crisis of 2008, while offering powerful lessons for property industry professionals on how to avoid having history repeat itself.
List of figures?ix Acknowledgements?xi Glossary?xiii 1 Introduction?1 Sub?-prime Lending Enters the Financial Vocabulary?2 The Global Extension?5 Commercial Property Market Context?6 Commercial Property’s Role in the Wider Economy?13 Property Investment and Short?-termism?14 Measuring Commercial Property Market Performance?14 Book Structure?16 2 Long?-term Changes to Property Finance and Investment?21 The Changing Role of the Banks in the United Kingdom?21 Property Development and Investment Finance?25 The Changing Investment Landscape of the Non?-banking Financial Institutions?29 The Other Main Players in Commercial Property?30 The Changing Face of Institutional Property Investment?31 Limited Partnerships?34 Jersey Rides to the Rescue?37 Unit Trusts and Indirect Investment?39 Conclusions?41 3 Economic Growth, Debt and Property Investment through the Boom?43 Global Economic Upturn and Debt Accumulation?43 The Property Boom and Escalating Debt?46 The Cost and Role of Debt?52 Development and its Finance in the Noughties Boom?57 The Weight of Money and Moving up the Risk Curve?61 Conclusions?63 4 The Anatomy of the Property Investment Boom?65 Commercial Property, the Macroeconomy and Globalization?66 Global Property Upswing?68 Market Trends in the Property Boom – Was Something Different this Time??71 UK Investment Trends?76 Lending To Commercial Property in the United Kingdom?82 A Property Boom in an Irrational Market?83 Summary and Conclusions?88 5 The Global Financial Crisis and its Impact on Commercial Property?91 A Crisis Unfolds?92 The Impact on Global Property Markets?95 Capital and Rental Values in the United Kingdom Post 2007?98 But This Time the Bust Was Also Different?100 Investment Trends and Capital Value Falls?106 Changing View of Risk?112 Summary and Conclusions?114 6 Property Lending and the Collapse of Banks?117 The Crumbling of the UK Banking System?118 Royal Bank of Scotland?121 Halifax Bank of Scotland?122 Britannia Building Society and the Co?-operative Bank?130 Dunfermline Building Society?131 Irish Banking Collapse?132 US Experience?136 Discussion and Conclusions?139 7 Aftermath and Recovery?143 The Macroeconomic Context?144 Property Market Trends?147 Bad Bank Debts and Impairments: The Road to Redemption?151 The Response of Property Investors, Property Funds and Property Companies?158 Property Lending Post?-GFC?161 Implications for the Pricing of Commercial Property and Investment?162 Conclusions?166 8 Conclusions?169 Globalization?171 The Boom and Bust through the Prism of Valuations?173 Role of Banking?173 Irrational Exuberance?174 Could It Happen Again??176 What Can Be Done??177 Final Thoughts?179 References?181 Index?191
Colin Jones, PhD, is Professor of Estate Management in the Institute for Social Policy, Housing, Environment and Real Estate at Heriot-Watt University, Edinburgh, Scotland, UK. He has published widely on spatial commercial, industrial and housing property markets, urban regeneration and the economics of housing policy. Stewart Cowe worked for thirty years in the investment division of Scottish Widows Investment Partnership. Edward Trevillion, PhD, is an Honorary Professor of Real Estate Investment and Finance in the Institute for Social Policy, Housing, Environment and Real Estate at Heriot-Watt University.
A fascinating analysis of the critical role commercial property investment played in the economic boom and bust during the global financial crisis The unprecedented financial boom stretching from the mid-1990s through 2008 ultimately led to the deepest recession in modern times and one of the slowest economic recoveries in history. It also resulted in the emergence of the draconian austerity policies that have swept across Europe in recent years. Property Boom and Banking Bust offers an expert insight into the complex property market dynamics that contributed to the Great Financial Crisis of 2008 and its devastating economic consequences. It is the first book to focus on a woefully underreported dimension of the crisis, namely, the significant role that lending on commercial property development played in the crisis. Among other key topics, the authors explore the philosophical and behavioral factors that propelled irresponsible bank lending and the property boom; how it led to the downfall of the banks; the impact of the credit crunch on the real estate industry generally in the wake of the financial crisis; the catastrophic effects the property bust had on property investors, both large and small; and how the financial institutions have sought to recover in the wake of the financial crisis. Provides valuable insights into what happened in previous booms and busts, particularly in the 1970s and 1980s, and how they compare with the most recent one Offers an expert assessment of the consequences of the global financial crisis for the banking system and the commercial property industry Examines strategies banks have used to recover their positions and manage the overhang of indebtedness and bad property assets Addresses strategies the real estate industry have used to recover from the collapse in property values Written in an accessible style, and featuring numerous insider case accounts from property bankers, Property Boom and Banking Bust disentangles the complex, tightly-woven factors that led to the Great Financial Crisis of 2008, while offering powerful lessons for property industry professionals on how to avoid having history repeat itself.

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