Lloyds made an upbeat assessment of the UK economy, predicting a rise in house prices this year, but also revealing disappointing first-quarter profits.
Britain’s biggest mortgage lender believes prices will rise by 1.5 per cent in 2024, helped by lower interest rates.
This reverses an earlier forecast of a 2.2 percent drop. He also cut his unemployment forecast and said customers were primarily dealing with cost-of-living pressures.
“We have seen an improving outlook,” said Chief Financial Officer William Chalmers.
The group, which also includes Halifax and Bank of Scotland, said its profits for the first quarter of 2024 fell 28 per cent compared to £1.63 billion in the same period last year.
Optimistic: Lloyds, Britain’s largest mortgage lender, now believes 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 £1.6bn drop in home loans after borrowers switched to rivals.
But it noted an uptick in mortgage applications.
Chalmers said Lloyds expected the market to grow by around 5 per cent over the course of the year.
The bank believes the Bank of England will cut interest rates three times this year as inflation recedes, supporting demand.
The brighter outlook comes after a period in which households came under pressure from inflation and borrowing costs.
Chalmers added: ‘There was a slow property market.
‘I think what we are starting to see in 2024 is a recovery of sorts.
Hargreaves Lansdown analyst Matt Britzman said the profit drop was expected.
‘Lloyds is demonstrating why UK banking is an attractive place to be now. Consumers continue to resist cost pressures.’
Lloyd’s Share rose 0.9 per cent, or 0.44 pence, to 51.78 pence.