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CML expects positive tone and stability for lending and property prices

The Council of Mortgage Lenders predicts that gross lending will increase by more than 10 per cent to £150bn by the end of next year.

It says lending will rise slightly from £136bn in 2010 to around £140bn this year. In December 2010, it estimated that lending would be static in 2011.

But the CML says there will continue to be weak demand for house purchase loans in the short term.

It does not foresee a sharp fall in house prices over the next 18 months and believes there will be a more positive tone to the market. It predicts there will be around 840,000 housing transactions this year, rising to 900,000 in 2012.

The CML predicts the number of people in arrears will be flat at 180,000 in 2011 and 2012 and repossessions will rise from 36,000 in 2010 to around 40,000 in 2011 and 45,000 in 2012.

A spokesman says: “The prospect of low but relatively stable activity in the housing and mortgage markets over the next 18 months is an unexciting one but by no means negative, given the adjustments being made in the wider economy.”

Emba group sales and marketing director Mike Fitzgerald says: “The CML has probably got it right and its view on the market is not wrong very often. There is definitely a small wave of optimism out there among brokers.”



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