Mortgage lending in 2015 higher than expected
Posted 30 December 2015 by
Keith OsborneThe total amount of mortgage lending in the UK this year has been stronger than expected, with a leading industry body upgrading its forecast for lending in both 2015 and 2016.
The Council of Mortgage Lenders (CML) says that it expects mortgage lending this year to be around £5bn higher than originally forecast, mainly thanks to cheap mortgage deals and the recovering economy.
The latest figures from the Council of Mortgage Lenders show that around £214bn of home loans have been advanced in the UK during 2015. The figures are higher than the CML expected which has led the body to revise its forecasts upwards for the remainder of this year and 2016.
The CML added that lending would end the year in a stronger position than it was in at the start, helped by the recovering economy and cheap mortgage deals.
In January, around £14.7bn of mortgages was advanced, and the CML said that during November this figure was estimated at around £19.9bn. Mortgage lending in November was around 23% higher this year than 12 months ago.
As a result, while the CML previously estimated that £209bn of mortgages would be handed out during 2015, it has revised that figure up to £214bn. Next year, it expects £237bn of home loans to be awarded, an increase from the previous estimate of £230bn.
In 2017, around £261bn of mortgages will be advanced, the industry body predicted.
CML economist Mohammad Jamei said: "Lending is set to finish the year stronger than it started, with the pace of lending recovering over the summer months.
"As we've said for the best part of 2015, lending continues to be supported by strong fundamentals, which are low inflation, strong wage growth, an improving labour market and competitive mortgage deals. Reflecting this recovery, we estimate lending this year will reach £214bn, up from our earlier estimate of £209bn."
Buy-to-let sector faces a “challenging period”
In its forecast for 2016, the CML said that it predicted the number of house sales taking place would continue to be limited by housing affordability pressures and housing supply shortages.
The organisation also warned that the buy-to-let sector would face a “challenging period” in 2016. Changes to income tax rules for landlords are set to take effect next year, in addition to a three percentage point stamp duty increase for people purchasing homes to rent from April.