Indicators "testify to an improving market" ? CML market commentary
Published: 22 January 2013 | Author: Bernard Clarke
Our estimate of gross mortgage lending of £11.7 billion in December – published on Monday – took our estimated total of the value of loans advanced in 2012 to £143 billion, a modest increase on the total of £141 billion in the preceding year.
The provisional data for 2012 completes a four-year cycle in which the volume of lending has been confined to a narrow band of between £135 billion and £144 billion, reflecting a prolonged period of stable, but subdued, mortgage market activity.
This year, however, we are expecting to see a modest increase in mortgage lending, building on a trend of stronger activity that we saw emerging in the final quarter of 2012. Improved conditions in mortgage funding markets should enable lending to break free from the narrow confines of the last four years, with a CML forecast of £156 billion advanced in 2013 – a 9% increase on the estimated total for 2012.
In our market commentary – published alongside the December lending estimate on Monday – CML chief economist Bob Pannell reflects on the "numerous indicators (that) testify to an improving housing market."
The commentary, which provides a more detailed analysis of our view of the market, concludes:
"We are more positive about the UK housing market and wider economy than a year ago, despite economic headwinds and downside risks.
"A key reason is that lenders currently face few funding pressures, in part reflecting the Funding for Lending scheme.
"House purchase activity was robust in the fourth quarter, on the back of better mortgage availability and pricing, and we expect this to continue over the coming months."