This year will be one of change for the housing market mortgage sector in the UK, helped by a more optimistic jobs and economic outlook, according to the Council of Mortgage Lenders (CML)…
This year will be one of change for the housing market mortgage sector in the UK, helped by a more optimistic jobs and economic outlook, according to the Council of Mortgage Lenders (CML).
Director general Paul Smee says that there are grounds for optimism following several quarters of a resilient job market, better credit availability and a more confident national mood.
The Council of Mortgage Lenders is forecasting total gross lending at an estimated £195 billion for 2014 and £206 billion in 2015.
‘This predicted upward trend is what we expect and hope for and there is little sign of an unbridled housing boom at this stage,’ said Smee.
He points out that the market will be dominated by the second phase of Help to Buy which was brought in three months early last October but also says there are still uncertainties surrounding its impact.
‘The competitive alternatives and the tightened lending criteria under the Mortgage Market Review made us predict in our forecast before Christmas that it will be a modest but positive contribution to the market,’ he explained.
He also pointed out that the biggest change in 2014 for the lenders, which will affect borrowers too, is the implementation of the MMR in April bringing in a host of new regulation. The new affordability rules will require extensive checks to verify income of borrowers and measure how affordable a mortgage loan is on current as well as future capital repayments.
‘This will be supported by the financial policy committee which has been clear it will monitor the market closely and take action if they see stability threatened. This new age of regulation will leave a lasting mark on the mortgage industry. Most likely it will help keep the market from overheating,’ he said.
‘The spectre of rising interest prices may deter some from lending but, as our forecast suggests, we predict the vast majority of households will cope with a slow transition to more normal interest rate levels,’ he added.