Mortgage lending to hit £240bn next year: Imla

The executive director of the Intermediary Mortgage Lenders Association said annual mortgage lending would continue to increase in the next couple of years but would still be 47 per cent below its 2007 peak in real terms.

In a 16-page study on mortgage lending in 2014-2015, What is the New Normal?, Imla revealed mortgage finance contributed 40 per cent of the total value of housing transactions in 2013, while just 63 per cent of transactions were mortgaged – the lowest figures since before the recession.

While Imla predicted an increase in mortgage lending in the next two years, it said a long-term, sustainable recovery was possible beyond 2017, backed by pent-up demand from first-time buyers, improving funding markets and the likelihood of low interest rates continuing.

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The association said the full scale of future growth would be affected by the unwinding of special measures such as Help to Buy and quantitative easing; efforts to address “woefully inadequate” housing supply; and the impact of the new “triple lock” of regulation.

Adviser view

Brian Murphy, head of lending for national advisory firm the Mortgage Advice Bureau, said: “The housing market grew significantly in 2013, and more people are now primed to buy for the first time or escape an equity trap by moving home.

“The availability of mortgage products is at a record high, while high loan-to-value ratios are making a return to the market as Help to Buy normalises 95 per cent mortgages. Easier access to mortgage finance, combined with historic low rates, means buyers’ prospects have improved vastly since the recession.”