Mortgage lending levels set to rise further in 2014
With housing market conditions rapidly improving, the Council of Mortgage Lenders (CML) estimates that mortgage lending levels will continue to increase next year as more people look to buy property.
The CML is forecast that gross lending will rise from an estimated £170bn in 2013 to £195bn in 2014, increasing further to £206bn in 2015. The CML also anticipates that net advances are likely to rise from £10bn this year to £15bn next year and £20bn in 2015.
Peter Williams of the Intermediary Mortgage Lenders Association (IMLA) is not surprised to see CML projecting further growth in the mortgage market, and actually thinks that its forecast of £195bn in gross mortgage lending for 2014 may be a rather "conservative estimate".
"It would be no surprise to see the annual total exceed £200bn next year, with over one million transactions a given and an increasingly important role for brokers," he said.
The CML also forecast that the volume of mortgages at 2.5% or more in arrears is likely to stay stable next year at around 150,000, but rise modestly to 160,000 in 2015. The number of repossessions is expected to fall from around 30,000 this year to 28,000 next year before returning to 30,000 in 2015.
Bob Pannell, CML chief economist, remarked: "Gross mortgage lending climbs above £190bn next year, its highest level since 2008. While this is largely on the back of the continuing revival in housing market activity, we also expect to see a meaningful turn-round in remortgage activity."