You are here: Home - News -

Mortgage lending in 2021 ‘likely to be higher’ than forecasts

by:
  • 18/03/2021
  • 0
Mortgage lending in 2021 ‘likely to be higher’ than forecasts
Gross mortgage lending for 2021 could be even higher than the £283bn forecast by the Intermediary Mortgage Lenders Association (IMLA) after the chancellor revealed further stimulus for the housing market in his budget, said a member of the trade body.

 

Speaking to Accord Mortgages managing director Jeremy Duncombe on the lender’s podcast, Rob Thomas principal researcher at IMLA, said the government’s Budget announcements and a higher than expected demand for housing meant lending could reach higher levels than predicted.

He said: “If I was doing the forecast now it would be likely to be higher than that figure [of £283bn] actually.

“I think the market is likely to be somewhat more bullish.”

UK Finance director of mortgages Charles Roe, who also appeared on the podcast, said if he was reforecasting UK Finance’s figure of £215bn, he would also revise gross mortgage lending upwards.

According to the Financial Conduct Authority’s figures, new mortgage lending for 2020 was £249bn, down by 10 per cent from £276bn in 2019.

Roe said a combination of positive market indicators, including the success of the Covid vaccine rollout, have convinced him that overall lending in 2021 will be higher than originally forecast.

He added: “I think we can expect increased demand from borrowers looking to squeeze in a purchase before the first or second step down in stamp duty.

“But advisers also need to take into account the end of the furlough scheme and what that means for borrowers and the ending of the mortgage payment deferral scheme as there will be some customers who may find their mortgage is unaffordable and look to downsize.”

 

Remortgaging will lag behind

Despite his predictions that lending will be higher than £283bn this year, Thomas said remortgaging will lag behind forecasts.

He said: “[Remortgaging] may remain weak [and] has been running significantly below the levels of our forecast.

“I think part of the reason for that is that I believe lenders have probably been prioritising customers who want to buy a house because lenders have had limited resources because so many people have been working at home.”

Thomas said remortgaging had the potential to return to pre-pandemic levels when bank staff returned to the office but it may have been permanently overtaken by product transfers as the dominant way to change mortgage deals.

 

There are 0 Comment(s)

You may also be interested in

Read previous post:
Houses of Parliament
Lords vote blocks government from ‘penalising’ leaseholders with cladding costs

The House of Lords has returned the Fire Safety Bill to the House of Commons to consider an amendment which...

Close