Growth in the mortgage market is expected to continue throughout 2014, following a period of faster than expected growth in the lending sector during the second half of 2013. According to the Intermediary Mortgage Lenders Association (IMLA) the period of July to December last year saw 86 per cent of lenders and 60 per cent of brokers reporting lending levels far higher than had been predicted. However, they also went on to point out that was still far from levels that would require intervention to prevent a housing bubble.
One of the biggest signs that the property market has seen a real turnaround in the last 12 months has been the difference in confidence among lenders. IMLA reports show that some 90 per cent now feel that the sector is in a good place, compared to just 37 per cent of those who were surveyed at this time in 2013. Only two per cent saw improvements in lending figures as being significant a year ago, whereas a striking 36 per cent now say this is the case.
However, perhaps the most encouraging fact at the moment is that in spite of a drastic quickening in the mortgage lending in the second half of last year, most brokers and lenders are still hopeful that this will not create a property bubble. Some 71 per cent of lenders and 74 per cent of brokers said that they felt the government would not need to take any action in the aftermath of a strong 2013.
"It is easy to forget just how low expectations were this time last year, with barely a third of brokers sensing an improvement in the mortgage market and a tiny minority placing any significance on it. A host of factors have contributed to a remarkable turnaround, including better funding markets, government support, consumer confidence and the improving economy," said Peter Williams, executive director of the IMLA.
And when it comes to the year ahead, the majority are expecting to see 2014 be the year of the first-time buyer, with these likely to be the biggest factor when it comes to growing lending figures. Thirty per cent of brokers are anticipating that the growth in business levels from newcomers will top ten per cent this year.
Read more about the changes to the mortgage markets coming in April
- Monday 27 January 2014