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Barclays chief expects further 15 per cent fall in house prices
Barclays’ chief executive John Varley has predicted a further 15 per cent fall in house prices in 2009.
In an interview with Sky News, Varley said the property crash was only about "halfway through", with house prices likely to fall another 15 per cent next year
"The negative house price inflation started in 2007, it's accelerated in 2008," he said.
"We're probably about halfway through that period, so in other words we've got another 10 to 15 per cent to fall between now and the end of next year."
He also described mortgage borrowing over the past 10 years as "madness", particularly when some people had been offered home loans that were 125 per cent of the value of the property and admitted that banks should accept some of the blame for the housing and economic slowdown.
Varley said: "There's no doubt about that. I think if you look at the players who were involved in what's happened to the world, I think there are quite a lot of players.
"They would include central banks, they would include governments, but they would certainly include the banks. And the banks have to be prepared to have the humility to acknowledge that and accept it and to say sorry."
Meanwhile today (15 December), Barclays has announced a lending commitment to small businesses to the tune of £16.5bn.
Barclays already has s £15bn in lending balances in place with SME customers in the UK market but has pledged to make at least a further £1.5bn available to small businesses in 2009, bringing its total commitment to some £16.5bn by the end of 2009.
It will also offer its CreditFocus service – which allows users to check the credit worthiness of up to five customers or suppliers – free of charge to all UK small businesses, whether or not they are a Barclays customer.
Varley said: "Especially during this time of uncertainty, Barclays is committed to lending to and supporting our business customers.
"We have a strong history of working with business owners through economic highs and lows, and that support will continue. Today's commitments are aimed at helping SMEs in the UK cope with the difficult environment."
