You are here: Home - News -

Housing market will recover by 2017 – L&G

by:
  • 06/12/2012
  • 0
Housing market will recover by 2017 – L&G
Brokers will have another four years or more to wait for the housing market to reach “a new normal” while levels of lending and home building may take until 2020 to recover, Legal & General has predicted.

The study, carried out by Cebr, estimated by 2017 the average UK house price would be £254,000, or 11.9% higher than the Q3 2007 peak of £227,000 and 17% higher than 2012.

However, it expected borrowing conditions to remain strict with only 674,000 mortgage approvals in 2017 compared to 1.25m in 2006 and the average LTV ratio for homeowners to continue to hover around 70%. The value of gross mortgage lending is projected to be £212bn in 2017 against £363bn in 2007.

The study also found the housing supply was likely to be depressed compared to pre-2008 levels.

Legal & General Mortgage Club managing director Ben Thompson told Mortgage Solutions at The Mortgage Event yesterday the study confirmed the housing market had reached the bottom: “In a very difficult decade, we’re now pulling towards recovery, towards a new normal, as we’re calling it, in 2017.”

The first step towards recovery was brought about by the Funding for Lending scheme, he suggested. “I know some are very quick to say it’s just going to help rebuild balance sheets but what I will say first hand is some people have some pretty bullish aspirations for next year.”

Affordability is expected to have improved by 2017 thanks to disposable income growth catching up with house price appreciation – the average house price to disposable income ratio in 2017 was estimated to be 5.8, compared to 6.5 a decade earlier.

But the level of homeownership was forecast to drop to 1980s levels of 57% compared to 68% at the 2007 peak.

 

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
Read previous post:
/IMG/255/241255/asus-vivobook-s200-windows-8-touchscreen-laptop.jpg
Online repossession service launched

Landlords could speed up the process of evicting problem tenants with the help of an online claims service.

Close