Gross lending is forecast to reach almost £287bn by the end of 2019 due to an improving economy and growing wages.
Timetric, a firm that provides business information services to financial services companies, predicts average growth of around 7 per cent each year until the end of 2019.
It forecasts gross lending to reach £218.6bn this year, from around £205bn last year, and then £241.6bn of lending in 2016. By the end of 2019 it says lending will have reached £286.8bn.
Timetric analyst Ben Carey-Evans says: “Rising interest rates, combined with reduced growth in the UK housing market, is set to stunt increases somewhat from the 15 and 22 per cent rates seen in 2014 and 2013 respectively.
“Improving economic conditions, however, particularly the continuation of improving real wages – due to extremely low inflation – should see gross lending rising at a steady rate up to 2019.”