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U.K. House Prices Fall the
Most Since 1992, HBOS Says
Svenja O'Donnell and Brian Swint
Bloomberg
Tuesday, April 8, 2008
U.K. house prices dropped by the most since 1992 in March as
the seizure of credit markets worldwide forced banks to pull mortgage
offers, a report by HBOS Plc showed.
The average cost of a home in Britain fell 2.5 percent to 191,556
pounds ($379,000) from February, HBOS, the U.K.'s biggest mortgage
lender, said in a statement on the Regulatory News Service today.
The 1 percent drop in the first three months of this year from
the fourth quarter was the biggest since 1995.
The pound fell after the report on speculation that the Bank
of England will reduce the benchmark lending rate on April 10
for the third time since December to prevent an economic slump.
Abbey, the U.K. unit of Spain's Banco Santander SA, today became
the last major British lender to withdraw its 100 percent mortgage
as rising funding costs hampers banks' ability to lend.
(Article continues below)
``We're in for a long period of house prices falling or not growing
at all,'' said George Buckley, chief U.K. economist at Deutsche
Bank AG in London. ``It's another reason for the Bank of England
to cut interest rates this week.''
Economists predicted a 0.3 percent monthly decline in house prices,
the median of 12 estimates in a Bloomberg survey show. The pound
fell as much as 0.4 percent against the dollar after today's report
and traded at $1.9767 as of 9:54 a.m. in London.
End of the Boom
The U.K. has the second-highest proportion of homeownership among
the Group of Seven industrialized nations, after Italy. A decade-long
housing boom fuelled 62 consecutive quarters of economic growth
and helped seal three election victories for the ruling Labour
Party led by Tony Blair, and his successor as Prime Minister,
Gordon Brown.
Full
article here.
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