Friday newspaper round-up: Housing bubble, Scotland, AO World

28th Mar 2014 09:10

The number of borrowers being offered dangerously large mortgages is at an all-time high, the Bank of England has warned. About one in ten homebuyers are borrowing more than four times their income, the Bank said, stoking fears that the nation is in the grip of an unsustainable housing bubble. In London, almost one in five buyers are taking out "high income-multiple" loans as the cost of the average property approaches 500,000 pounds. - The TimesThe European Commission has dealt a blow to First Minister Alex Salmond and left Scotland facing a massive pensions blackhole if there is a Yes vote in the referendum. Officials declared there would be no change in the rules governing cross-border pension schemes - despite a widely held belief that the regulations were to be relaxed. Finance secretary John Swinney was among those who expected the European Union to make the change. - Scotsman Some of London's leading hedge funds are betting that AO World's share price will slide amid speculation that the online appliances retailer makes more money from selling warranties than it does from shifting white goods. While AO World refuses to split out the profits it makes from selling washing machines and kettles compared with insurance policies, speculation has been rife in the stock market that warranties accounted for as much as 90% of its earnings. - The TimesCreditors of Lehman Brothers are to receive an additional payout of $17.9bn, more than five years after the investment bank plunged into bankruptcy and pushed the global financial system into chaos. The distribution in the United States, including to third parties such as hedge funds that bought the bank's debt at a discount after the bankruptcy, will bring the payouts to $56bn. Further payments are expected to bring the final total to $80bn. - The TimesThe City has switched into overdrive, the London Stock Exchange has revealed, with money raised on the Square Mile's markets almost doubling so far this financial year.  The LSE said the total cash raised in the 11 months to the end of February was £28.3bn, compared with £14.8bn in the same period last year. This equates to a 91% increase in the financial year so far, with the number of new fundraisings or stock market floats soaring to 162 from 107. - The Daily MailMorrisons chief executive Dalton Philips is giving up his annual bonus after a disastrous year in which Britain's fourth-biggest grocer issued two profits warnings and saw bank details of 100,000 staff posted online after a theft. He decided to give up a cash-and-shares award totalling £374,000 after the group lost market share and warned underlying profit for 2014 would be half the £732m analysts were expecting. New finance director Trevor Strain chose to take his bonus of £211,000 and sold shares to pay the tax liability. - The Daily MailAB