HBOS predicts 20% fall in house prices
by Gill Montia
HBOS, the banking group that owns Halifax, is predicting that house prices will fall by up to one-fifth over 2008 and 2009 combined.
The lender expects a worsening economic climate to escalate the downturn in the housing market and has announced that will be repricing around one-third of its mortgage products during the remainder of this year.
Reporting a 51% fall in profit for the first half of the year, the Edinburgh-based lender said its bad debts had risen 36% in the six months to the end June.
This week, Abbey overtook Halifax as the UK’s largest lender of new mortgages, with a market share of 26% in the first-half of the year. HBOS took 7% of net new lending during the six months.
Abbey has been able to grow its mortgage share because it has been cushioned from the credit crisis by its parent company, Santander.
The Spanish bank has been able to access support from the European Central Bank.
HBOS still has a 20% share of the total mortgage market but says it has no plans to increase this.
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