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Lloyds Bank CEO says UK house prices will fall by up to 10% this year

Real EstateLloyds Bank CEO says UK house prices will fall by up to 10% this year

LONDON – UK house prices will fall by up to 10% this year as higher mortgage rates and a wider cost of living crisis constrain home buying, Lloyds Bank said.

CEO Charlie Nunn said on Tuesday.

The UK housing market has come under pressure after former Prime Minister Liz Truss’ disastrous ‘mini-budget’ in September, and amid concerns over rising interest rates, lenders are pulling about 10% of all mortgage products out of the UK market. 40% have been withdrawn.

UK house

The UK property sector has been sluggish in recent months as the Bank of England continued to aggressively raise interest rates to spur double-digit inflation. The country is expected to enter its longest recession on record.

Inflation hit 10.7% in November, and the bank raised its policy rate from 0.1% to 3.5% at its ninth consecutive monetary policy meeting.In the upcoming months, more rises are anticipated.

Home asking prices rose slightly in January for the first time in two months, according to a report by British property website Rightmove on Monday.

“Our base case for 2023 is a recession – a mild recession – GDP of about -0.1% this year, unemployment remaining high, supply-side constraints, interest rates of about 4%, and It’s due to the imminent recovery,” Nunn said on the sidelines at the World Economic Forum in Davos, Switzerland.

“Housing costs, which are down roughly 8-10% this year, are another issue that many people are looking at.”

According to the independent Office of Budget Responsibility (OBR), living standards for UK households would decrease at their fastest rate ever. Lloyd’s sees a “two narrative scenario,” according to Nunn, CEO of the largest retail and commercial financial services firm in the UK.

“First off, there is a relatively tiny but crucial segment of customers who struggle to make ends meet, mortgage or no mortgage. In the UK, one can observe this. About 1% of our consumers are affected, and we must really concentrate on helping them “said he.

“While we are seeing far more customer groups having to adjust their spending to accommodate rising costs of living and higher mortgage spending, there is a growing trend across businesses, households and among high-income people in the UK. We’re still seeing real resilience and strong spending, and you see us coming through.”

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