Trouble in the housing market isn't just endemic of the U.S. The U.K.'s largest mortgage lender, HBOS plc, Thursday spooked investors ahead of its impending £4 billion ($7.8 billion) rights issue by issuing a gloomy prognosis of the U.K. housing market and saying more of its customers were falling behind with loan repayments.
Continue reading below
The bank expects house prices to fall by 9% this year -- a worse forecast than the midsingle-digit decline it had indicated earlier. It also predicts 2008 housing market transactions will decline by 45% year-on-year.
The shares fell sharply to hover dangerously close to the discounted 275 pence price of the forthcoming rights issue, having undershot that price last week. By early afternoon they were down over 5.3% at 302 pence, giving HBOS a market value of £11.3 billion. Underwriters Dresdner Bank AG and Morgan Stanley will be keeping their fingers crossed. - Laura Board
See story from Reuters
