The Council of Mortgage lenders has recently published its 2013/14 mortgage market forecasts alongside its mortgage lender evaluation of the market based on interviews with the national lenders.In summary it indicates , there are significant reasons for optimism as it believes the market recovery which began this year should continue into next year, reinforced partly by the mpact of the Funding for Lending Scheme.
This time last year, the CML had forecast that 2012 would see 825,000 property transactions, £133 billion of gross lending, and £8 billion of net lending.
The fact is, activity has been far stronger than CML expected, and the revised estimates to the end of 2012 stand at 930,000 transactions, £144 billion of gross lending and £9 billion of net lending. While these activity levels remain far below the abnormal boom experienced before the financial crisis, they do provide a springboard for cautious optimism for 2013.
The CML's central forecast for 2013 are for 950,000 property transactions, £156 billion of gross lending, and £12 billion of net lending in 2013, falling back a little in 2014 after the FLS drawdown window ends to 930,000, £150 billion and £11 billion respectively. This envionrment and the increased levels of lending will assists many of those borrowers on high interest standard variable rates and should enable many to obtian a home remortgage.
CML chief economist Bob Pannell comments: "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."