Mortgage lenders have revised their housing market predictions for this year, expecting more housing transactions but fewer purchases using mortgages than they initially forecast.
The Council of Mortgage Lenders (CML) recently reported that mortgage lending in June was at a seven-year high. It now expects 1.2m housing transactions, up from the 1.18m it predicted in December 2014.
However, it also thinks gross lending will be £209 billion this year, not the £222 billion originally forecast.
If the CML is correct, transactions will be almost equal to last year.
Although significantly improved since the sub-million transaction levels seen between 2008-12, transactions are still well below pre-recession activity. In 2006, there were almost 1.7m property sales.
The CML also expects 16,000 repossessions this year, down from the 22,000 it forecast last December.
In June, the CML found that gross lending increased by 29% compared to May and 15% annually. This is the highest figure since July 2008.
The CML says that its predictions could cause confidence in the market in the next few months.
Mohammad Jamei, CML Economist, says: “Activity is picking up after a slow start to the year. Our lending figure for June may be flattered by the end of political uncertainties related to May’s general election and the underlying picture is likely to be one of only modest recovery.
“This should be supported by favourable conditions in the economy, though it will be limited by rising house prices and affordability pressures.”1