9% fall in house prices during 2008

HBOS, the UK's biggest mortgage lender, has forecast that UK house prices are set to fall by 9% this year.

In an update, HBOS said the housing market remained "subdued" and the number of transactions this year would be down by 45% on 2007's level.

Its comments came ahead the launch of its rights issue through which it is aiming to raise £4bn from shareholders.

In February, HBOS said house prices would be "flat" in 2008. Then, in April, the Halifax house price survey predicted "a mid single digit percentage decline".

Figures last week from the Nationwide building society suggested that house prices were down by 4.7% in the first five months of the year, and by 3.2% in the past three months.

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