IMLA: 2014 will be better than CML forecast
Commenting, Peter Williams, executive director of IMLA, said: “At this stage our instinct is that even the forecast of £195bn in gross mortgage lending for 2014 may be a 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 post-MMR.
“The withdrawal of the Funding for Lending Scheme will certainly have an impact on growth in the mortgage market but that impact will be lessened by improving credit conditions, strong consumer demand and the added momentum of Help to Buy.
“With another busy year ahead it is vital that government, regulators and the Bank of England are not consumed by fears that a mortgage market restoration will inevitably result in a ‘bubble’ inflating out of control. Even if 2014 brings £200bn of gross lending this would still be 10% less than in 2002 and little more than half [55%] of the total recorded in 2007. Urgent attention is needed on housing supply but the Office for Budget Responsibility’s house price forecast for 2018 still has real house prices 3.1% lower than at their 2007 peak.
“The mortgage market has taken great strides this year, but this has been achieved with no small measure of government help. Even with £195bn+ lending on the cards for 2014, we are still a long way from a fully restored and sustainable market. Far from pressing the panic button, the task in hand calls for lenders to stay focused on offering reasonably priced and affordable mortgages while the construction industry ups its game to radically improve housing supply.”