US property could gain from bailout plan

In news that may interest those thinking of investing in US property, the government of the country has announced it is taking a stake in several leading banks.

The administration is to spend USD250 billion (GBP142 billion) on the move, designed to safeguard the banks by providing them with capital in a similar move to the one announced in Britain.

Funding for the measure will be provided from the USD700 billion that Congress authorised for the purpose of safeguarding the banking system.

Those investing in US property may hope that this situation leads to more stability, which in turn could allow for more mortgage lending and a recovery in the property market.

Several European banks have also announced government measures to safeguard their financial systems.

The UK bailout has seen GBP37 billion spent on helping three banks; the Royal Bank of Scotland, Lloyds TSB and HBOS.

Details were announced in parliament yesterday by chancellor Alistair Darling.