Current Outlook of UK Housing Market Grows Stronger
The current outlook for the UK housing market is strong, according to the latest forecast from the Council of Mortgage Lenders. The general election marked a time of significant slowdown in the amount of activity, but now a correction is taking place and activity is picking up. Enough so, that talk of an increase in the base rate is now consuming many discussions among leading economists. House prices are once again increasing at an above average rate, and remortgage activity is primed to take off.
CML chief economist, Bob Pannell, commented on the current action taking place within the UK housing market, saying: “Several of the government’s fresh housing initiatives will take time to take effect and so do not fundamentally reshape market prospects this year or next, as far as we can judge at this stage.”
Pannell continued: “Although buy to let business volumes continue to expand, the underlying pace of growth in buy to let activity, both for house purchase and refinancing, has been slowing, following its strong recovery over the past few years. Policy interventions in the buy to let space may reinforce this downward trend.
We expect a further improvement in arrears and possessions this year and anticipate that the overwhelming majority of borrowers will cope with the modest interest rate increases that start in 2016.”
Pannell concluded his comments discussing the status of gross mortgage lending compared with earlier estimates, saying: “We now expect gross lending of £209 billion, compared with our earlier estimate of £222 billion.”