28th
Oct 2022
Lloyds Banking Group forecasts that house prices will plummet by 7.9 per cent in 2023 followed by a period of stagnation right up until 2027.
The UK’s largest mortgage lender has put aside a £668m damage limitation for bad debts which it expects because of interest rates increase causing loans and mortgages affordability...
Despite the group’s announcement of its pre-tax profits of £1.5 billion in the third quarter of the year, this is still 25 per cent lower on the same quarter last year.
The group implies it is already being far stricter with its lending criteria, Lloyds’ chief financial officer William Chalmers, said: "So far at least, our customers are proving to be resilient and adapting well to the cost-of-living increases that we have seen.”
However he added: "We are deliberately ensuring that we lend to customers who are best placed to withstand potential future stresses on the macro level and in their own personal circumstances."
Lloyds 7.9 per cent house price fall forecast is the most likely case, however its worst-case scenario could be a massive fall in prices by up to 18 per cent next year. The banking group also forecasted that the UK economy will fall by 1 per cent in 2023 with its worst case-scenario in economic terms by a massive 4.5 per cent.
The banking group stated that its profits fall was because of the impact of a 40 year high inflation rate last month on a flagging economic outlook, however the bank said it was only seeing a “very modest evidence of deterioration” in its current credit performance.
In his statement to shareholders chief executive Charlie Nunn, said “The current environment is concerning for many people and we are committed to maintaining support for our customers.”
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