The Lloyds (LSE:LLOY) share price has gone gangbusters in 2025. At 77.2p per share, the FTSE 100 financial institution has soared 40% since 1 January.

To place that in context, the broader Footsie has risen by a extra modest 6%.

However can Lloyds shares hold up the momentum? I’m not so positive. Right here’s 4 the reason why I feel they might topple from present ranges.

Mortgage market cools

Lloyds is the UK’s largest mortgage supplier, and so depends on a robust properties market to drive income. Happily, the long-term outlook on this entrance is powerful because the home inhabitants booms.

Nevertheless, issues are trying much less rosy within the extra fast future. Mortgage approvals are sinking in response to Stamp Responsibility modifications final month.

Internet mortgage approvals for house purchases droppped by 3,100 month on month to 60,500 in April. This was the fourth drop in a row as demand from first-time patrons moderated. A continued decline might pull Lloyds shares in the identical route.

Financial gloom

Whereas falling rates of interest are offering some assist, rising bother for the UK financial system might put further stress on mortgage demand. Certainly, this threatens to additionally derail demand throughout Lloyds’ different product traces, to not point out drive up mortgage impairments.

Home progress is below pressure as tax rises weigh and enterprise confidence drops. Moreover, Britain’s financial system faces a slew of long-running structural points like excessive public debt, regional inequality, and expertise shortages in key areas.

And in contrast to different FTSE 100 banks like HSBC and Barclays, Lloyds lacks substantial publicity to abroad markets to minimize the issue and assist it develop earnings.

Automotive crash

The cost safety insurance coverage (PPI) scandal value banks a mixed £50bn in years passed by. Some analysts are tipping a equally costly consequence when the Supreme Courtroom decides on automotive lending practices in July.

In that case, this might decimate earnings and have vital dividend implications for Lloyds. The Black Horse financial institution is the nation’s main motor finance supplier.

Up to now, the financial institution’s put aside £1.2bn to cowl any potential authorized prices if the follow of ‘secret’ commissions from lenders to automotive retailers is deemed improper. This might show means, means wanting the mark.

Conversely, a beneficial ruling from the Supreme Courtroom might drive Lloyds’ share price greater. However the dangers associated to this saga stay uncomfortably excessive.

Excessive valuation

Lastly, I don’t assume that Lloyds shares supply engaging worth following their current price spurt. In reality, I imagine it really seems to be barely overpriced from an historic perspective.

With a price-to-book (P/B) ratio of 1.1, the financial institution trades at a slight premium to the worth of its internet belongings. That is additionally greater than its 10-year common of 0.8.

In the meantime, its price-to-earnings (P/E) ratio of 10.6 occasions surpasses the 7.9 occasions it’s averaged for the previous decade. And its dividend yield of 4.5% is an effective distance under the 10-year common of 5.8%.

Such readings depart the financial institution additional in peril of correcting if information stream worsens. On stability, I’d reasonably discover different UK shares to purchase proper now.