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CML predicts £140bn gross lending for 2010

The Council of Mortgage Lenders has forecast that gross lending will remain relatively flat this year at £140bn, compared to the £143bn in gross advances lent last year.

The latest forecast is £10bn less than the CML predicted last November.

The trade body’s net lending forecast for this year has also been revised down, from £15bn in November to £12bn, the same level as last year.

But the CML is more optimistic with its arrears and repossessions forecast. It predicted in November that there would be 205,000 mortgages in arrears this year, but has now lowered this to 175,000.

A total of 39,000 repossessions is now forecast for 2010, compared with the previous forecast of 53,000.

In the CML’s News & Views newsletter CML economist Paul Samter (pictured) warns that the mortgage market will remain subdued as tighter regulation and concerns about funding are brought to bear.

Samter points to the end of support schemes such as the Special Liquidity Scheme and the Credit Guarantee Scheme which will further constrain funding availability and therefore lending supply.

He also believes that the FSA’s Mortgage Market Review could have “significant impact on lenders’ appetite to lend.”

Samter says: “As the proposals currently stand, they could permanently restructure the lending landscape, shrinking the mortgage market, restructuring relationships between lenders and intermediaries, excluding some creditworthy potential first-time buyers, and preventing some existing borrowers from moving or remortgaging as some product types are removed from the market permanently.

“The cumulative impact remains to be assessed but, even at this early stage, we think this will have a significant impact on borrowers’ housing choices in the future. Fewer will be able to become home owners if the current FSA proposals proceed.

“With remortgage activity likely to remain subdued for some time yet, and housing turnover to remain at low levels, gross lending will remain much lower than it was in the years preceding 2007.”


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