Bank predicts 9% fall in house prices

HBOS, the UK’s largest mortgage lender, is warning house prices could fall by 9% this year
An increasing number of people in mortgage arrears have prompted HBOS, owners of the Halifax, to issue a warning on house prices.

The bank believe that prices could fall by up to 9% this year and have described the housing market as remaining “subdued”. They estimate that the number of transactions – which usually trigger spending on RMI work – would be 45% lower than in 2007.

Today’s comments follow those of February, when the bank said house prices would be “flat” for 2008, and April, when they said there would be a “mid single digit percentage decline”.

Figures last week from the Nationwide building society indicate a fall in house prices of nearly 5% for the first quarter of 2008 and by 3.2% in the past three months.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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