Housing crisis: House prices to fall 9%

House prices will to fall by 9% this year and housing transactions will plummet 45%, mortgage lender HBOS has predicted.

In its gloomiest assessment yet, the bank said trading was “satisfactory” but mortgage arrears were rising.

HBOS yesterday wrote down the value of its equity stakes in housebuilders by half because of deterioration in the sector in recent weeks, the Financial Times reported.

The bank has £4.2bn in lending to, and investment in, the housebuilding sector and said debt safety was underpinned by collateral values, including land banks.