But there is still a long way to go before we arrive at conditions which are close to ‘normality’.
Continued growth requires careful handling with a host of potential pitfalls rushing into view. The changes engendered by the Mortgage Market Review (MMR) will create a new set of ‘normal’ parameters for applications and approval decisions. And when it comes to housebuilding, the last thing we need is the old status quo which for years has meant a woefully inadequate supply of new homes.
Where mortgage lending is concerned, IMLA has forecast continuing growth that will push gross lending up to £240bn by 2015. Such a figure sounds bold when we have become used to subdue activity during the deepest downturn since 1945.
But it is still nothing more than a modest recovery and we are still clawing our way back from such a low base that current mortgage lending sits well below historic levels in real terms.
Confirmation that interest rates will remain low until spare capacity in the economy has been absorbed should aid the return to health. Our sector is especially sensitive to rate changes and competitive rates have played an integral part in the recovery so far without encouraging irresponsible lending.
Pent-up demand from first time buyers is one of the key factors that makes a long-term, sustainable recovery possible. Government support will help to carry momentum for now, but our ultimate aim must be to shape a market that can function normally without this support and still meet buyers’ and homeowners’ needs. Its strength is returning but the market still needs handling with care.
Peter Williams is executive director of IMLA
