Mortgage lending to top £1 trillion mark
Despite growing rapidly in recent years, borrowing has been dwarfed by the amount of unmortgaged property wealth held by UK home-owners, which currently stands at £3.6 trillion.
Housing equity is the largest component of total wealth held by people living in the UK.
Mortgage lending has helped fund a dramatic expansion of home-ownership, from 60% to 70% of the population during the last 20 years. But with 80% of people wanting to be home-owners, there is still a gap between those who own and those who would like to. The government has recognised this, stating that it is keen to help another million people become owner-occupiers by 2010 and to expand home-ownership to 75% of the population in the longer term.
Despite the recent expansion of lending, there are few signs that it has reached a ‘natural’ limit, with continuing growth expected for the foreseeable future. But lenders continue to support measures to make home-ownership more sustainable. The CML has worked for a number of years to improve the safety net for borrowers. It is also a strong supporter of campaigns like the Financial Services Authority’s financial capability initiative, which seeks to improve consumer understanding and decision-making.
Commenting on the growth of the mortgage market, the CML’s director general Michael Coogan said: “The £1 trillion threshold is clearly a landmark but it does not have any particular significance for policy-makers or others. Although it is a milestone, it will perhaps soon be forgotten as home-ownership and mortgage lending continue to grow further. Over time, owner-occupation has the potential to create wealth and independence for people, and we will continue to work for the expansion of sustainable home-ownership.”