Posted by Mark on 28th Feb 2010
Over the last week or so we have had number of meetings with our funding partners. They have ranged from wizened old UK industrial investors, to fresh faced US opportunity funds, both of which suggested that the current liquidity problem is certainly not driven by a lack of equity. To be fair even debt is now available to to investors who are able to buy assets that fit the pfandbrief model or the idiosyncratic credit models of the UK banks who are now lending,
The Ellandi view is that lack of liquidity is largely supply side phenomena, nevertheless matched by an insane level of yield seeking capital, which as my Oxford Poly economics tutor Marion pointed out nearly twenty years ago, will have only one effect on prices.
Bizarrely both investors used the phrase "constipated" to describe the log jam (if you will excuse their unintended scatological pun) to describe the lack of distressed assets that are coming to the market.
In principle I couldn't agree more and it occurred to me that the children of Barcelona have similar frustration every Christmas with Caga Tio.
The big questions then, perhaps, for UK property market, is what is the stick and who is going to wield it?