Print friendly version 19 Jun 2008

House prices to fall by up to 9%

UK house prices could fall by up to 9% this year, according to HBoS.

In a trading statement issued to the stock exchange this morning, the banking group – which comprises Halifax and Bank of Scotland, as well as brands such as Intelligent Finance, BM Solutions and The Mortgage Business – also said the UK housing market remained subdued with transactions likely to be 45% lower in 2008 than last year.

According to the statement, HBoS currently writes approximately one in five new mortgages in the UK. At the end of 2008, mainstream mortgages accounted for 72.1% of new lending, buy to let accounted for 12.7%, self-certification deals comprised 13% of its lending and “other lending” made up 2.2%. The average loan-to-value (the proportion of the property covered by the mortgage) was 47% at the end of last month. The banking group also stated mortgages in arrears have risen in line with its expectations at the start of the year.

HBoS added that trading has been “satisfactory” and in line with expectations. The group claimed to be “on track to demonstrate a resilient performance in 2008”.

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