Questions still need to be answered in 2014
Peter Williams is executive director of the Intermediary Mortgage Lenders Association
Today’s CML figures and analysis show how far the mortgage market has changed in 2013, buoyed not least by a clear commitment from the highest levels of government to make getting a mortgage a far more realistic proposition than during the recession.
The Funding for Lending Scheme (FLS) and Help to Buy have been important factors in stimulating market confidence and expectations. Indeed the planned withdrawal of FLS support in 2014 and the lack of market reaction to this are clear indications that wider conditions have improved, and mortgage lending can now continue to grow under its own steam.
Indeed IMLA’s view is that the market in 2013 will exceed the £170 billion set out in the CML figures.
The fact that greater lending volumes have been achieved this year while at the same time mortgage arrears and repossessions continue to fall would suggest that a responsible, risk-adverse approach is now more deeply engrained in the market’s culture. With the new rules under the Mortgage Market Review (MMR) coming into force in April 2014, it will be important to retain the balance between tighter controls and the real and still unmet homeowner ambitions that remain across the UK.
Questions still need to be answered during 2014 – including what the new ‘normal’ will look like for the mortgage lending market, what funding is needed to support it, and who will be inside this new market or outside of it. Until the situation becomes somewhat clearer we will not know what levels of homeownership the market can support and what role government must play. Despite this we end the year on a good note.