This positive trend began when lending in 2011 totalled £140.7bn, which surpassed most people’s expectations.
The Council of Mortgage Lenders predicted £138bn and IMLA members were even more conservative at £130bn.
This year has also started well, with January 2012 gross mortgage lending at £10.5bn, up 10% on last year, and housing transactions rising to 64,000, an increase of 23% from last year.
IMLA’s own survey of intermediaries, a snapshot of which was given in my last blog, concluded that overall, intermediaries are not expecting a decline in any business area.
The most positive sentiment related to remortgages and to the buy-to-let market.
Buy-to-let accounted for around a third of business for intermediaries in Q4 2011 and they were also positive about the outlook for this sector – 56% were expecting to see an increase in buy-to-let business.
Also, in the last quarter of 2011, almost a third of intermediary business related to remortgages. When asked about the outlook for this type of business, 47% of intermediaries were expecting to see an increase and only 5% expected a decline during the first quarter of 2012.
This is quite a contrast to findings in our March 2009 survey when, despite the fact around half of their business was in remortgages, only a quarter of intermediaries expected growth in this business area and a further quarter predicted a decline.
The positive outlook seen in the most recent survey is likely to be related to the 17% increase in lending for remortgages experienced in 2011.
Remortgage numbers by volume and value have been declining since 2007 and last year was the first time there has been an increase.
This is positive news for intermediaries, who can provide specialist information to individuals in the market looking to refinance, especially those that have had little success on the high street. It is a critical time for many homeowners, as several lenders have recently increased their SVR rates.
Despite these positive signals, I will again end on a note of caution.
The market remains constrained and there is still a level of nervousness because of the eurozone and wider economy, which explains the weaknesses that still exist in the housing market.
John Heron is chairman of IMLA
