CML: mortgage market set for growth
Whilst this represents slower growth that seen in 2014 it will still represent the strongest levels of growth since 2008.
The CML said: “We are much less optimistic than other commentators such as the Office for Budget Responsibility, on whether annual housing market transactions (on the HM Revenue & Customs measure) can climb back to the level of between 1.4 and 1.5 million seen as the longer-term norm.
“Indeed, in our view, a slightly softer housing market will provide the backdrop for our market forecasts through 2015 and 2016.
“This, in turn, suggests that further recovery in mortgage lending activity may be rather limited over the next two years, especially as there are a number of uncertainties and mostly downside risks in several areas that have previously supported the housing market revival.”
The CML’s predictions were backed by Ray Boulger, John Charcol senior technical manager, and Paul Broadhead, head of mortgage policy at the Building Societies Association.
Boulger said: “I predicted £225bn for next year so we are in a similar ballpark and I wouldn’t argue with 240bn for 2016 either.”
And Broadhead said: “About 10% growth per year is about right.
“We are starting to see confidence return but we have seen a lull which will continue until the general election, though it depends on the Bank of England’s macro-prudential tools.”
But David Whittaker, managing director of Mortgages for Business, thinks the CML has undershot its predictions of 2016 lending.
He said: “Due to the general election you’ll have a sub £100bn first half of 2015 and a better latter half after the summer.
“If you follow that through it suggests they are undershooting 2016.
“Once the general election is out of people’s way they will get on with it – it doesn’t matter who wins.”
Broadhead added: “Once you start forecasting more than a year ahead it gets difficult because so many factors can affect it.
“As it stands I wouldn’t disagree with what they are saying.”