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HBOS chief sees UK house prices falling for at least 12 months
Andy Hornby, Chief Executive of Halifax Bank of Scotland told the BBC's Business Editor Robert Peston that the credit crunch will last a further 18 months. He confirmed that HBOS is only lending what it is taking in as customers deposits, which explains it's extraordinary focus on getting deposits in.
Hornby expects UK house prices to continue falling for at least a year. He said that HBOS had reduced it's mortgage lending 2 years before the credit crunch, which suggests that they realised that the market was running out of control.
The increase in wholesale funding costs will be passed through fully to borrowers, and the reduction in competition amongst lenders means that the prices increases will stick.
Hornby sees Assets backed securities being traded in volumes again in the 3-5 year period ahead, and only then will the volumes of lending pick up again.
Hornby expects UK house prices to continue falling for at least a year. He said that HBOS had reduced it's mortgage lending 2 years before the credit crunch, which suggests that they realised that the market was running out of control.
The increase in wholesale funding costs will be passed through fully to borrowers, and the reduction in competition amongst lenders means that the prices increases will stick.
Hornby sees Assets backed securities being traded in volumes again in the 3-5 year period ahead, and only then will the volumes of lending pick up again.
Mon, 8th Sep 2008