The Council of Mortgage Lenders forecast for 2012 was for some 825,000 property transactions, £133bn of gross lending and £8bn of net lending. Activity was, however, stronger than expected and the CML predicts that at the end of this year, there will have been 930,000 transactions, £144bn of gross lending and £9bn of net lending.
That good news is set to continue, with the CML central forecast for the coming year reflecting greater optimism with an expected 950,000 property transactions, £156bn of gross lending and £12bn of net lending.
The organisation does, however, predict at this early stage that those levels may fall back a little in 2014, as the boost from the Government’s cheap loans scheme, the Funding for Lending program, fades.
Bob Pannell, CML chief economist, said:
“Whereas the FLS was conceived by the UK authorities to mitigate the worst impacts of a potential fresh credit crunch, its launch has in fact coincided with a more positive external funding environment, in part due to European Central Bank actions.
“Given this more benign context, in our view the FLS now has the potential to underpin a modest pick-up in mortgage lending activity… A key test, however, will be the extent to which greater borrower appetite materialises in response to better credit availability.”
A greater level of choice in the mortgage market is also expected to have a positive impact. Mr Peter Whiteley, Director with Together Financial Solutions in Barnstaple, Devon, stated:
“Mortgages are now easier to secure than they have been, compared with say four years ago, with more choice available. The prospects of even more choice coming to the market throughout 2013 are good.”
The Building Society Association (BSA – www.bsa.org.uk) lends credence to this theory, finding in its Property Tracker Survey that “consumers are finding it easier to access mortgage finance than at any time since the survey started in June 2008”.
About 45% of respondents said mortgage access was a barrier to home ownership in December, compared with nearly 60% last year.
Commenting, BSA Head of Mortgage Policy Paul Broadhead states:
“Looking ahead to 2013, there is no doubt that sensible creativity will be required from all of those involved in the mortgage market. There is potential to grow and develop alternative forms of tenure for the future, although simplicity and transparency for the consumer must be at the core of any such developments. In addition, it would be helpful if government and regulators could decide their priority between the ‘lend and lend now’ rhetoric and the demands to grow capital – lenders can’t do both.”
Work still to do in 2013 then, but the signs, from the mortgage market at least, are good.
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