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Rise in mortgage problems this year, Lloyds predicts

28 February 2011
Written by rosalind renshaw

Lloyds Banking Group, which is 41% owned by taxpayers, has said it is concerned about the housing market.

Lloyds expects a 2% drop in house prices this year, together with a rise in mortgage impairments. The bank lends one in five of all mortgages in the UK.

The group’s share of the mortgage market shrunk by 2% last year, Lloyds said when it unveiled its results. Its share of gross mortgage lending was 22.1%, down from 24.1% in 2009.

New lending was £30bn, including £5bn for first-time buyers, compared with a total of £34.7bn the year before.  

The proportion of mortgages with an LTV of greater than 100% was 13%. In this sector, mortgages in arrears of three months or more increased slightly and at £3.2bn represent 0.9% of the portfolio.

Lloyds says the number of mortgage customers new to arrears has also remained relatively stable in the last twelve months, and is now well below the peak experienced in the second half of 2008.

The average LTV on new mortgage lending in the year was 60.9%, compared with 59.3% for 2009.

Overall, the group made underlying

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