The Council of Mortgage Lenders says it has no plans to revise its 2011 gross lending estimate of £140bn despite the current eurozone debt crisis and the slump in global stockmarket indices.
Gross lending totalled £136.3bn in 2010 and in May, the trade body revised its 2011 gross lending estimate up from £135bn to £140bn.
Lenders advanced £63.7bn in the first six months of the year, meaning that lending will fall short of the CML’s forecast unless there is a pick-up in the mortgage market.
A CML spokeswoman says: “Although we will undertake the usual assessment later in the year, we have no imminent plans to issue any revision.”
Capital Economics UK economist Samuel Tombs says the eurozone debt crisis and turmoil in the financial markets is likely to affect demand for mortgages. He says: “It will affect consumer confidence and it could mean people are less likely to take out loans. When consumers’ wealth falls, they tend to save more of their income are reluctant to take on new debt.”
John Charcol senior technical manager Ray Boulger says: “I was surprised that the CML upped its original forecast of £136bn to £140bn a couple of months ago.
“Given what has happened in the markets since then, the Council of Mortgage Lenders’ original forecast looks likely to be closer to the outcome we will see at the end of the year than the revised forecast.”
Home Funding chief executive Tony Ward says: “I think that the CML’s revised forecast is unachievable, considering that we were £6bn down on the target at the end of June. I think we will be lucky if gross lending remains flat.”