Ami warns lending to remain subdued until 2015

Gross lending is unlikely to increase significantly until 2015 as the there is a paucity of growth catalysts driving the mortgage market, according to the Association of Mortgage Intermediaries.

Commenting on Ami’s most recent Quarterly economic bulletin, Ami director Robert Sinclair said: “Although gross mortgage lending jumped in Q1 due to first-time buyers rushing to complete house purchases ahead of the end of the stamp duty holiday in April, re-mortgaging values remain subdued.

“There is little sign of real energy returning to the bottom of the market with few mortgage options available. We expect gross lending this year to be under £135bn despite the good start to the year.

“Due to lenders restructuring their balance sheets this is now unlikely to increase significantly during 2013 and 2014.”

Although the report focuses on the UK’s slide back into technical recession in Q2 and therefore presents a mixed picture on GDP, it does reference “better than expected” unemployment figures and a slow declining trend in inflation as positive elements of the current economic malaise.

However, with export demand damaged by problems abroad, low corporate investment, squeezed household incomes and cuts to government spending, the Ami said there was “no obvious stimulus for rapid growth”.

Mr Sinclair, who recently elucidated on his plans for the newly-independent Ami in an interview with FTAdviser, added: “The housing market remains volatile and London continues to lead the way with higher prices, although we have concerns over the impact of the new stamp duty band for homes valued over £2m which will significantly impact on larger buy-to-let investors and property investment companies.

“The lack of credit combined with negative real income growth provides little impetus and with rents remaining close to record highs, we are at a decision point in the cycle.”