Credit crunch ‘could last another 18 months’

19 September 2008

The Chief Executive of the UK’s largest home loans provider has said that the credit crunch could last another 18 months or longer before the market begins to recover.

Andy Hornby, chief executive of HBOS, told the BBC that lenders would struggle to offer loans until they could raise significant extra funds on the wholesale financial markets.

He said that house prices were not likely to rise again until 2010, while lenders waited “to give the confidence back into the system for banks to start lending again”.

Hornby suggested that the mortgage market would need to recover before lenders could easily offer other forms of credit such as personal loans.

“It’s going to take 18 months before US house prices have started to rise again - which is what`s required for banks to have the confidence to start lending again. It will take a long time to play out,” he said.

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