Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

UK house prices will not stop falling until 2025, Lloyds Bank data forecasts

by October 25, 2023
October 25, 2023
UK house prices will not stop falling until 2025, Lloyds Bank data forecasts

UK house prices will continue to slide this year and in 2024 and will not start to recover until 2025, Lloyds Banking Group has forecast.

The lender, which owns Halifax and is Britain’s largest mortgage provider, said that by the end of 2023 house prices would have fallen 5% over the course of the year and were likely to decrease by another 2.4% in 2024.

The forecasts, which were released on Wednesday alongside the group’s third-quarter financial results, suggest an 11% decline in property prices from their peak last year, when the market was still being fuelled by a rush for larger homes after the coronavirus pandemic.

Santander is predicting a larger drop in UK house prices for the whole of 2023 of about 7%, followed by a smaller 2% fall in 2024.

Both lenders said the first signs of growth would start to emerge only in 2025, with Lloyds economists predicting a 2.3% increase in house prices that year and Santander expecting a 2% rise.

“The housing market in 2023 has been a little bit softer than we saw in previous years,” Lloyds’ chief financial officer, William Chalmers, said. “Having said that, as you know, there has been an increase generally in the housing market for a number of years to date, and so we’re retracing a part of those steps.”

Meanwhile, Lloyds said its own finances were being squeezed, as it started to pay out higher interest rates to its savers.

It said its net interest margin, which is a key driver of bank income and accounts for the difference between what is charged for mortgages and paid on savings, narrowed from 3.14% to 3.08% in the July to September period. Lloyds blamed that on “expected mortgage and deposit pricing headwinds” and Chalmers said the decline was expected to continue into the following quarter.

Similar trends have weighed on Barclays, which on Tuesday revealed that its net interest margin had dropped, and would fall further over final three months of the year. Barclays’ chief executive, CS Venkatakrishnan, said the bank had been “very disciplined and prudent and passed through interest rates to customers”.

Competition has forced lenders to start reducing costly mortgage rates while paying out more for deposits, as savers increasingly shop around for more lucrative returns.

It follows pressure from regulators and politicians, who this year accused banks of failing to pass on interest rate rises to their savings customers at the same speed they were increasing charges for borrowers.

Lloyds still managed to report a rise in pre-tax profits to £1.9bn for the three months to September, up from £576m a year earlier. However, that figure has been restated to align with new accounting rules.

Its profits were also flattered by a 72% decrease in the amount of money put aside for potential defaults, to £187m. That compares with the £668m put aside during the same period last year, when it frontloaded its cash cushion amid fears of an economic downturn that could hit the UK housing market.

Lloyds said the number of customers falling behind on mortgage payments was “broadly stable” in the third quarter, and that the growth in defaults had also slowed, but was still slightly above pre-pandemic levels.

Santander also said it had seen a “modest increase” in customers falling further behind on mortgage payments, but added that it expected higher-for-longer interest rates to have a “more pronounced impact on households and businesses” in future.

Chalmers said Lloyds was contacting customers to offer debt advice and shift some borrowers on to better rates. “It is a very extensive outreach programme that is adopted proactively by the bank to ensure that customers that need support get it,” he said.

Danni Hewson, head of financial analysis at the investment platform AJ Bell, said it was clear that Lloyds – at least for now – was “managing to keep bad debt under some kind of control”.

She said: “The key question for investors is how long the company can continue to enjoy some sort of benefit from the higher cost of borrowing and if – or when – the strain on household finances becomes so acute the level of loans gone bad starts to balloon.”

Read more:
UK house prices will not stop falling until 2025, Lloyds Bank data forecasts

0
FacebookTwitterGoogle +Pinterest
previous post
The benefits of networking for small businesses
next post
Britain’s drivers demand ‘three factors’ from new Budget amid anti-motorist purge

You may also like

Inheritance Tax Receipts reach a record breaking £7.5...

April 24, 2024

English Wine Producers Anticipate Bumper Harvests Following July...

August 12, 2023

Royal Mail warns of £120 million cost increase...

November 22, 2024

Protesters Target Barclays Branches in Nationwide Demonstrations

June 11, 2024

The Future of Marketing: Integrating SMS and AI...

April 18, 2024

AI could give your SME a whole floor...

January 11, 2024

UK oil and gas sector ‘must it must...

October 6, 2023

Britishvolt in rescue talks to save gigafactory project

January 10, 2023

Women required to provide more evidence of their...

April 4, 2023

Make UK backs Labour’s industrial strategy, sees surge...

October 21, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Don’t Give Big Businesses Immunity from Litigation

      June 27, 2025
    • Unmasking Medicaid Money-Laundering Schemes: Medicaid Financing Gimmicks 101

      June 27, 2025
    • Top moments from the Trump-Biden debate that changed the course of the 2024 election

      June 27, 2025
    • Trump exerted ‘maximum pressure’ on Iran and Israel to ‘deliver peace’: Leavitt

      June 27, 2025
    • Iranian foreign minister reiterates ‘serious damage’ to nuclear facilities, despite ayatollah’s comments

      June 27, 2025
    • Maybe Most People Do Not Want Teacher-Led Public School Prayer—But They Do Want Chaplains

      June 27, 2025

    Categories

    • Business (8,329)
    • Investing (2,077)
    • Politics (15,829)
    • Stocks (3,173)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved