Lending in the UK housing market will rise by 9% by the end of 2013, according to predictions by the Council of Mortgage Lenders (CML).
According to the CML, gross lending in December last year hit £11.7 billion, bringing the year’s total lending to £143 billion, up from £141 billion in 2011. This has given rise to a more positive outlook for the future, with predictions that gross lending in 2013 will reach £156 billion.
Chief economist of the CML, Bob Pannell, said they have high hopes for this year’s lending market, ‘despite economic headwinds and downside risks.’ He comments further that ‘a key reason [for the boosted optimism] is that lenders currently face fewer funding pressures’ thus they are lending more, aided by the engagement of the Funding for Lending Scheme (FLS).
But, not everyone shares Pannell’s optimism. Yasin Patel, of Mayfair Bridging, believes the market is not completely ‘in from the cold’ just yet, but acknowledges the FLS has contributed to the rise in lending seen in the fourth quarter of 2012. He says the scheme has had an impact on lenders as they ‘are not just cutting rates, but they are offering more products- even the high LTV loans they had shunned for so long.’
This comes alongside the Bank of England’s Credit Conditions Survey stating that lending increased in the last three months of 2012, which can be expected to continue in the start of 2013. This may result in borrowers having more opportunities to access 95% mortgages and other high LTV loans.