CML predicts stable mortgage market in 2012

According to the Council of Mortgage Lenders (CML), UK mortgage lending in November 2011 was an estimated £13.0 billion, the fourth month in a row that there has been a year-on-year rise. This is 5% higher than in October 2011, and 13% higher than in November 2010.

The CML published its latest housing and mortgage market forecast update on 15th December, confirming that it now expects gross mortgage lending in 2011 to total £138 billion. For 2012, the CML's new central forecast is for £133 billion, slightly down on 2011, reflecting the weaker economic environment that now seems likely. However, with so much uncertainty at present, especially about the Eurozone, this is subject to considerable variation in either direction.

The CML expects a continuing low level of housing transactions in 2012. While an estimated 852,000 transactions are likely to have taken place in 2011, slightly fewer transactions are expected next year with a central forecast of 825,000. Whilst this ‘new normal’ is considerably lower than the peak activity reached in 2007-2008, the stability of the housing market is in everyone’s interests and such stability should give those contemplating a move in 2012 the confidence to continue with their plans. Recent government housing initiatives should help to boost the number of house purchases made by first-time buyers, but the overall market impact depends upon mortgage credit availability.

For good advice on mortgages and finance, contact Private Finance on 0800 980 8777.