Lloyds predicts 8% fall in UK house prices

UK location prices volition autumn by 8% adjacent twelvemonth and past astir stagnate for the pursuing 4 years, Lloyds Banking Group has predicted.

The UK's biggest owe lender, which runs the Halifax brand, gave a gloomy outlook for the UK economy.

It has acceptable speech £668m to screen atrocious debts arsenic rising involvement rates marque loans and mortgages little affordable.

The banking radical announced pre-tax profits of £1.5bn successful the 3rd 4th of the year.

That was a 25% driblet connected the aforesaid play past year.

Banks typically marque much wealth erstwhile involvement rates emergence arsenic the spread betwixt what they wage savers and what they complaint borrowers widens, but the accelerated summation successful borrowing costs seen successful the past twelvemonth has made the slope gloomier astir the wide economical outlook for the UK.

However, it said astir of its owe customers would inactive beryllium capable to withstand cost-of-living pressures.

"So acold astatine least, our customers are proving to beryllium resilient and adapting good to the cost-of-living increases that we person seen," said the bank's main fiscal officer, William Chalmers.

"We are deliberately ensuring that we lend to customers who are champion placed to withstand imaginable aboriginal stresses connected the macro level and successful their ain idiosyncratic circumstances."

Customers facing arrears, defaults and write-offs remained debased and beneath pre-pandemic levels, the slope said.

Mr Chalmers added that Lloyds' lending was skewed towards "slightly amended off" customers to guarantee they could wage backmost their loans if conditions got tougher.

The Bank of England's benchmark involvement complaint is 2.25%, and Lloyds warned that this could highest astatine 4% successful 2024 earlier falling back.

Mr Chalmers admitted that this higher involvement complaint situation could pb to a slowdown successful the lodging marketplace successful the years ahead.

An 8% driblet successful location prices, if it happens, risks putting immoderate caller buyers into antagonistic equity, particularly if prices neglect to retrieve for immoderate time.

However, specified a autumn would not really wholly cancel retired the summation successful location prices successful the past year. The most caller information from the Office for National Statistics shows that the terms of the mean UK location accrued by 13.6% successful the twelvemonth to August to £296,000.