In its latest issue of News & Views the CML forecasted tentative growth in all sectors of mortgage borrowing.
It concluded that industry gross lending will climb from £207bn this year, to £222bn in 2015, spread across regulated and buy-to-let lending, house purchase and remortgage.
The CML envisaged further growth to £240bn in 2016, as “cash purchases ease back and nominal incomes growth supports resilient house prices and loan values.”
The report said of its predictions: “We are much less optimistic than other commentators such as the Office for Budget Responsibility, on whether annual housing market transactions (on the HM Revenue & Customs measure) can climb back to the level of between 1.4 and 1.5 million seen as the longer-term norm.
“Indeed, in our view, a slightly softer housing market will provide the backdrop for our market forecasts through 2015 and 2016.
“This, in turn, suggests that further recovery in mortgage lending activity may be rather limited over the next two years, especially as there are a number of uncertainties and mostly downside risks in several areas that have previously supported the housing market revival.”
The report added that buy-to-let lending should continue to make some headway, although this may be limited by “uncertainties about regulating it or the activities of landlords more generally”.
It concluded: “Looking ahead over the next two years, housing and mortgage market developments appear well supported by relatively favourable economic fundamentals. However, prudent and sustainable lending in the face of ongoing affordability pressures necessarily limit the further upside scope for mortgage lending.”
