Lloyds predicts property prices will rise in 2024
LLOYDS Bank offered a boost to home owners and those trying to get on the property ladder today when it said prices will rise and the cost of new mortgages will fall this year.
Its prediction that the Bank of England will cut rates three times by the end of the year — starting in the summer — is consistent with earlier forecasts.
But it has changed its mind on house prices which it now expects to rise 1.5% this year, much better than the 2.2% fall previously predicted.
Chief financial officer William Chalmers said there is a “more benign economic outlook”, and the housing market had proved more resilient than expected.
The bank also says unemployment will stay low — good news since Lloyds is seen as a proxy for the performance of the wider UK economy.
It reported a 28% fall in first quarter profits to £1.6 billion.
There was an impairment charge of £57 million compared with loans of £448 billion.
The quarter saw less mortgage lending than in the previous period as customers sat tight with worries about the cost of living swirling.
Lloyds reassured the City by saying that results this year would be in line with expectations, although profit margins will fall to 2.9% from 3.22%.
Britain’s biggest bank insisted it will keep supporting customers.
CEO Charlie Nunn said: “Guided by our purpose, we are continuing to support customers and successfully execute against our strategic outcomes… This underpins our ambition of higher, more sustainable returns that will deliver for all of our stakeholders as we continue to Help Britain Prosper.”
Lloyds shares have been in the doldrums for years. Today they slipped 2% to 50p. They are down 18% over five years.
The bank has set aside £450 million to cover possible costs from a regulatory probe into car loans.
Gary Greenwood at Shore Capital thinks the shares are a buy. He said: “We note that the group has not taken any further provision in respect of the FCA’s review into discretionary motor finance commissions.”
Zoe Gillespie, investment manager at RBC Brewin Dolphin, said: “Lloyds’ numbers have begun to slow, which was to be expected as interest rates appear to have peaked and competition in the mortgage market heats up.
“While the bank’s profits and net interest margin may have been squeezed, they are still at strong levels. More generally, Lloyds appears to be in relatively rude health and in a good position to manage the potential fall of interest rates later in the year.”
Nigel Farage, the former Ukip leader, said last year that he had opened a new bank account with Lloyds following the “debanking” scandal at NatWest-owned Coutts.
NatWest could offer fresh competition to Lloyds this year with the Government keen to finally offload its stake in the bank, now at 33%.
Former NatWest CEO Alison Rose departed over the Farage bank scandal after she leaked details of his account to a journalist.
New CEO Paul Thwaite will unveil NatWest’s first quarter results on Friday.
With interest rates falling, all bank profits are likely to come under pressure.
months to 2 March, driven by more currency woes. Like-for-like revenue, before currency adjustments, was down a much more modest 3%.
The rapid devaluation of the Nigerian Naira in the past year has been a major source of trouble for PZ Cussons.
The business noted that recent shareholder returns “have fallen short of our expectations”, and so it will “refocus” its business.
It said the St. Tropez line of self-tanning products — which has American supermodel Ashley Graham, below, as its brand ambassador — had “significant long-term growth potential”, but that this wouldn’t be realised under PZ Cussons ownership, as the group needed to focus resources elsewhere. As a result, it has put the brand up for sale.
In Africa, the business said it was “evaluating the strategic options both to reduce risk and to maximise shareholder value”, but did not provide further detail on these options.