Lloyds delivered an upbeat assessment of the UK economy as it predicted a rise in house prices this year – but also revealed disappointing first-quarter profits.
Britain’s biggest mortgage lender thinks prices will rise 1.5 per cent in 2024, helped by lower interest rates.
That reverses a previous forecast of a 2.2 per cent fall. It also cut its forecast for unemployment and said customers were mostly coping with cost of living pressures.
‘We have seen an improved outlook,’ said finance director William Chalmers.
The group, which also includes the Halifax and Bank of Scotland, said its profits for the first quarter of 2024 fell 28 per cent compared to £1.63billion in the same period last year.
Upbeat: Lloyds, which is Britain’s biggest mortgage lender, now thinks house prices will rise by 1.5% over the course of 2024, helped by lower interest rates
It faced fierce competition in the mortgage market, with a £1.6billion dip in home loans after borrowers switched to rivals.
But it pointed to a pick-up in mortgage applications.
Chalmers said Lloyds expected the market to grow by around 5 per cent over the course of the year.
The bank thinks the Bank of England will cut interest rates three times this year as inflation recedes, which will support demand.
The brighter picture comes after a period when households were squeezed by inflation and borrowing costs.
Chalmers added: ‘There was a slow housing market.
‘I think what we are starting to see in 2024 is a bit of a recovery.
Matt Britzman, analyst at Hargreaves Lansdown, said the fall in profits was expected.
‘Lloyds is showing why UK banking is an attractive place to be now. Consumers remain resilient to cost pressures.’
Lloyds shares rose 0.9 per cent, or 0.44p, to 51.78p.
#fiveDealsWidget .dealItemTitle#mobile {display:none} #fiveDealsWidget {display:block; float:left; clear:both; max-width:636px; margin:0; padding:0; line-height:120%; font-size:12px} #fiveDealsWidget div, #fiveDealsWidget a {margin:0; padding:0; line-height:120%; text-decoration: none; font-family:Arial, Helvetica ,sans-serif} #fiveDealsWidget .widgetTitleBox {display:block; float:left; width:100%; background-color:#af1e1e; } #fiveDealsWidget .widgetTitle {color:#fff; text-transform: uppercase; font-size:18px; font-weight:bold; margin:6px 10px 4px 10px; } #fiveDealsWidget a.dealItem {float:left; display:block; width:124px; margin-right:4px; margin-top:5px; background-color: #e3e3e3; min-height:200px;} #fiveDealsWidget a.dealItem#last {margin-right:0} #fiveDealsWidget .dealItemTitle {display:block; margin:10px 5px; color:#000; font-weight:bold} #fiveDealsWidget .dealItemImage, #fiveDealsWidget .dealItemImage img {float:left; display:block; margin:0; padding:0} #fiveDealsWidget .dealItemImage {border:1px solid #ccc} #fiveDealsWidget .dealItemImage img {width:100%; height:auto} #fiveDealsWidget .dealItemdesc {float:left; display:block; color:#004db3; font-weight:bold; margin:5px;} #fiveDealsWidget .dealItemRate {float:left; display:block; color:#000; margin:5px} #fiveDealsWidget .dealFooter {display:block; float:left; width:100%; margin-top:5px; background-color:#e3e3e3 } #fiveDealsWidget .footerText {font-size:10px; margin:10px 10px 10px 10px;} @media (max-width: 635px) { #fiveDealsWidget a.dealItem {width:19%; margin-right:1%} #fiveDealsWidget a.dealItem#last {width:20%} } @media (max-width: 560px) { #fiveDealsWidget #desktop {display:none;} #fiveDealsWidget #mobile {display:block!important} #fiveDealsWidget a.dealItem {background-color: #fff; height:auto; min-height:auto} #fiveDealsWidget a.dealItem {border-bottom:1px solid #ececec; margin-bottom:5px; padding-bottom:10px} #fiveDealsWidget a.dealItem#last {border-bottom:0px solid #ececec; margin-bottom:5px; padding-bottom:0px} #fiveDealsWidget a.dealItem, #fiveDealsWidget a.dealItem#last {width:100%} #fiveDealsWidget .dealItemContent, #fiveDealsWidget .dealItemImage {float:left; display:inline-block} #fiveDealsWidget .dealItemImage {width:35%; margin-right:1%} #fiveDealsWidget .dealItemContent {width:63%} #fiveDealsWidget .dealItemTitle {margin: 0px 5px 5px; font-size:16px} #fiveDealsWidget .dealItemContent .dealItemdesc, #fiveDealsWidget .dealItemContent .dealItemRate {clear:both} }
