CML predicts uncertain 2012 for housing market
Thursday, 15 December 2011 10:52 AM
Economic uncertainty is likely to plague the housing and mortgage market in 2012, predicts the Council of Mortgage Lenders (CML).
Their 2012 forecast envisages £133bn of gross lending and £5bn of net lending markedly lower than the respective £138bn and £9bn, which are expected to be the final figures for 2011.
Much of the negative effect will be felt in the number of transactions, which is not expected to rise from the 825,000 it is likely to reach this year.
The CML anticipates that repossessions will rise to 45,000 from the estimated 37,000 this year, but noted that this figure is still lower than 2009.
Bob Pannell, CML chief economist, said: "The weak state of the wider economy and household finances creates a challenging and highly uncertain backdrop for the housing and mortgage markets.
"Despite the fact that activity levels have already been subdued for several years, we have pencilled in a broadly flat picture – for both mortgage lending and property transactions - at least until real incomes show signs of stabilising as inflationary pressures recede."
However, he added that there may be light at the end of the tunnel if European leaders manage to navigate a path through the Eurozone problems and heal the stress in the financial markets.
In comparison to the CML's concerning predictions for 2012 the figures for November 2011 were fairly encouraging.
Gross mortgage lending stood at £13bn, showing a fourth consecutive year-on-year rise.
Richard Sexton, director of e.surv chartered surveyors, said, "While the gross mortgage lending figure for November is pretty stellar, the future does not look so bright.
"The recent international economic turmoil has landed a series of heavy blows to the mortgage market – blows that will leave it still feeling groggy in the New Year.
"Credit conditions are congealing, and confidence is low. The best we can hope for is for lending to slide only marginally in 2012 - predictions of a flat market now look optimistic."
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