The Council of Mortgage Lenders says gross lending in 2012 has exceeded expectations, with lending now predicted to reach £144bn.
In December 2011, the CML forecast 825,000 property transactions, £133bn in gross lending and £8bn in net lending in 2012. The year is now expected to end with 930,000 transactions, £144bn in gross lending and £9bn in net lending.
Citing “cautious optimism” regarding 2013, the CML has today published a forecast of £156bn for next year, with 950,000 transactions.
CML chief economist Bob Pannell says: “Whereas the Funding for Lending scheme was conceived by the UK authorities to mitigate the worst impacts of a potential fresh credit crunch, its launch has in fact coincided with a more positive external funding environment, in part due to European Central Bank actions.
“Given this more benign context, in our view the FLS now has the potential to underpin a modest pick-up in mortgage lending activity.
“A key test, however, will be the extent to which greater borrower appetite materialises in response to better credit availability.”
The CML predicts gross lending figures will fall back slightly in 2014 as the Funding for Lending scheme winds down.
Gross lending is expected to fall back to £150bn in 2014, representing 930,000 transactions.