PRESS DIGEST - Financial Times - May 3

FALL IN NEW BANKRUPTCY FIGURES

New figures from the Insolvency Service show that the number of new bankruptcies in the first quarter fell compared with the same period last year. There were just over 25,000 individual insolvencies in England and Wales in the first three months of the year, a fall of 13 percent compared with the first quarter of 2007. However, 858 companies were placed into administration, up from 557 in the last quarter of 2007, and there was an 85 percent jump in companies going into receivership, up from 147 to 273 in the same period.

HOUSE PRICES DOWN ON YEAR

A survey by the UK's biggest mortgage lender suggests the downturn in the property market is gathering pace as house prices continued to fall in April, registering the first year-on-year decline in more than a decade. Halifax said prices in the three months to April were 0.9 percent lower than for the same period in 2007, the first time its index of house prices had shown an annual fall since 1996. The index fell by 1.3 percent in April, a bigger drop than analysts expected. Malcolm Barr, economist at JPMorgan, said: "At this stage ... the fall in house prices is gaining momentum".

BUYERS WITH SMALL DEPOSITS BEING FROZEN OUT OF MARKET

Borrowers who are unable to come up with a large deposit for a mortgage are being priced out of the housing market as lenders remove 100 percent and above loan-to-value (LTV) deals, with many now cutting LTV requirements further. "The longer the liquidity squeeze continues, the more lenders are likely to reduce the number of products available at high LTVs, or pull them altogether," said Melanie Bien, director of Savills Private Finance mortgage broker. The difference between interest rates available for borrowers with limited down payments and those with large deposits has widened to one percent in recent months from around 0.4 percent last year, according to brokers.