Intermediary lenders are optimistic about the prospects for the UK mortgage market this year with net gross lending of £150 billion anticipated.
The Intermediary Mortgage Lenders Association (IMLA), who account for over 80 per cent of lending in the intermediary sector, predict that growth for 2013 will be slightly lower than the Council of Mortgage Lenders estimate of £156 billion gross lending, but still points to optimism for growth.
The IMLA predictions follow a strong end to last year for the UK mortgage market, with £11.7bn of gross lending during December bringing the total estimate for 2012 to £143bn, including net lending of £9bn. An estimated 930,000 residential property transactions were recorded in 2012 – the first time this has exceeded 900,000 since 2008, and significantly more than the CML prediction of 825,000.
On average, IMLA members anticipate 940,000 residential transactions for 2013, though 40 per cent felt the total will be higher and 20 per cent predicted more than 1 million residential transactions over the next twelve months.
There is little expectation of significant movement in the average UK house price, which stood at £161,490 according to November’s Land Registry figures. IMLA members predict the average price in June 2013 will be around £164,000.
In terms of market share, IMLA members expect first-time buyers to account for almost a quarter (23.9 per cent) of total gross lending, with over a third (35.9 per cent) going on remortgaging and just under a fifth (17.6 per cent) comprising buy-to-lets.
For 2013, IMLA members predict the greatest increase in high LTV lending will occur in the 85-89 per cent bracket. Over half (58 per cent) expect to see up to a 10 per cent increase in the number of 85-89 per cent LTV loans, while almost a quarter (21 per cent) expect to see growth of up to 15 per cent.
More than half of members (57 per cent) also expect to see up to 5 per cent growth at the 90-94 per cent LTV level. However, almost all members (86 per cent) say there will be no more lending at 100 per cent LTV during 2013 than there was in 2012.
IMLA members pinpointed the journey towards implementing the final rules and guidance for the Mortgage Market Review (MMR) as the key issue facing the market in 2013, alongside individual broker registration and adapting to the new Financial Conduct Authority (FCA) regime. Settling the future of the buy-to-let market was also seen as very important.
Peter Williams, Executive Director of IMLA, said: “It is encouraging to see our members taking a positive, yet pragmatic, outlook for 2013. There is a general consensus that we will see positive growth in the UK housing market, both in terms of mortgage lending and total residential transactions. Industry figures show that 2012 ended on a high note, and we have every reason to expect this to support further recovery in the market this year.”
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