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U.K. House Prices Fall the Most Since 1992, HBOS Says Svenja O'Donnell and Brian Swint 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.
``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.
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