HBOS Forecasts 9% Drop In UK House Prices In 2008
While the company may be in the midst of a £4 billion funding call, HBOS, which takes in the bell weather of the UK mortgage market Halifax, has issued something of a downbeat statement on the UK property market and revised forecasts for the future. Just recently the bank had been suggesting a mid-digit fall in property prices this year but now this has been revised to a 9% fall for 2008. HBOS has also admitted that further provisions will be required for bad debts and losses associated with the credit crunch.
Interestingly HBOs has confirmed that like most other UK banks, the company is lending less but actually making more profit margin on new transactions. This will not go unnoticed by the regulators with many consumers of the opinion that the banking sector is trying to squeeze as much profit as possible out of customers.
If any one company in the UK was well position to forecast the housing market it is HBOS, with the group selling 1 in 5 mortgages in the UK. While it expects to be a little less active in the market place in the short to medium term, the City has always appreciated and respected the views of this group.
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