Royal Bank of Scotland and Lloyds Bank may post a combined £17.7bn of writedowns after the UK’s property slump worsened.

Lloyds may set aside £11.3bn for bad loans, a fourfold increase from the previous year, according to the median estimate of eight analysts surveyed by Bloomberg. RBS may report £6.4bn in provisions, up from £1.48bn pounds a year earlier, the analysts said.

'The key fear in our minds is write-offs from distressed commercial property and residential property,' said Richard Champion at Principal Investment Management.