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Nationwide and Halifax ditch forecasts

Nationwide and Halifax are to ditch their annual forecasts thanks to the turbulence of this year’s markets and the predicted turbulence of next year.

The lenders, who both normally give end of year predictions, have decided to quit the practice in light of the continuing problems the UK housing market is facing. Both will still offer monthly House Price Indexes.

The Council of Mortgage Lenders this week predicted negative net mortgage lending in 2009, as well as 500,000 arrear cases and 75,000 repossessions. Previously the Council had refrained from predicting anything thanks to the volatility.

At the end of last year, Nationwide predicted house price growth would slow to 0 per cent, when in fact its last House Price Index showed house prices had dropped by 13.9 per cent, year on year.

Halifax was more bullish in its prediction; in 2007 it said that UK house prices would also fall to 0 per cent – its latest House Price Index showed a drop of 14.9 per cent, year on year. It also predicted that interest rates would go down to 5 per cent by the end of 2008, not 2 per cent. It also said the UK economy would face a “gradual slowdown”.

A spokesman for Halifax says: “Because of the merger with Lloyds TSB, we will not be doing our 2009 prediction. We will continue to do our monthly Index next year.”

A spokeswoman for Nationwide says: “We are not currently planning to release any forecasts for 2009, we are finding it too difficult to predict at this time.

“But that is not to say we will not be releasing any predictions in 2009 – we will review things at a later date. But we will still be releasing our HPI next year.”

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