Britain’s banks may have to write off £38bn of mortgage debt as plunging house prices send almost a fifth of the home loans on their books into negative equity, according to leading City analysts.
The prediction, by Bernstein research, is based on forecasts that property values will fall between 25 and 35% from their peak.
The biggest loser is expected to be Halifax owner HBOS with almost £6bn of write-offs between 2009 and 2011.
Observer 07/09/08 page 2
