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Bank warns of 10 per cent fall in house prices this year

Spanish bank Santander says UK residential property prices look set to fall 10 per cent this year and will return to 2021 levels.

It’s also anticipating a 1.3 per cent contraction in the wider UK economy this year and warns that some 400,000 of its borrowers are due to come off fixed-rate deals this year: they are set to face an average £313 hike in repayments each month.

The bank also says it’s seen a “marked slowdown” in demand for new loans in recent months.


Santander set aside £321m for mortgage repayment defaults in 2022 and £65m of credit provisions in the fourth quarter. Although residential mortgage arrears remain low so far, it says it saw a small number of business customers defaulting in last year’s final months.

A statement from the bank says: “The outlook remains uncertain as inflation has eroded real disposable income with the prospects of a recession ahead. These challenges for households and businesses are expected to continue into 2023 and could impact credit quality.”

Mike Regnier, chief executive at Santander UK, adds: “The end of 2022 saw a marked slowdown in mortgage lending and, with an uncertain economic outlook for 2023, we will continue to focus on a prudent approach to risk while we help people and businesses prosper.”


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