The chief executive of HBOS (the UK’s leading mortgage lender) Andy Hornby says he thinks that things won’t change until the American housing market revovers, and this he thinks will be well into 2010.

He claims that until the American housing market shows a marked imrpovement, that American banks wouldn’t put their money into British banks, and it is this investment which is required for mortgage lending and personal lending. He also suggested that there isn’t much the UK governement could do in order to speed up this process.

“My personal view, for what it’s worth, is it will take 18 months to play through the system,” Hornby said yesterday. “It’s going to take at least that time before US house prices start to rise again, which is what’s required for banks to have the confidence to start lending again.”

Hornby added that there was “no doubt” that the UK would experience plummeting house prices, something that has not occurred since the 1990s.

But Hornby was not entirely pessimistic – he does not expect unemployment to reach the heights of that era.