IMLA members expect continued slow growth
Monday 25th June 2012
Members of the Intermediary Mortgage Lenders Association are predicting that growth will remain slow for the next 12 months.
IMLA – lenders who do the bulk of their business through intermediaries – reported in January that members expected 2012 to be challenging, and their consensus has not changed in their mid-year review, which was published before Friday’s downgrading by Moody’s of three UK banks.
Almost three-quarters (73%) of members think the bank base rate will still be at 0.5% in June 2013. They expect growth to remain sluggish with GDP at 0.55% in 12 months. Whilst this view is lower than the January survey (0.91%), the range of views was more positive (0%–1.25%).
Lenders also expect house prices to remain more or less static, with an average price prediction of £160,000.
On the mortgage market, lenders are realistic not optimistic, predicting gross mortgage lending for 2012 of £131bn, just higher than their January prediction (£130bn) but still £10bn lower than 2011 gross lending (£141bn).
They have higher expectations for buy-to-let, predicting £15.1bn gross lending by the end of 2012, up from £14 billion in 2011. Lenders expect the highest proportion of intermediary business in 2012 to be in buy-to-let.
Peter Williams, IMLA executive director, said: “Given recent developments in the economy it is no surprise that our member predictions remain subdued.
“Whilst the outlook may seem bad, it is important to emphasise that the survey does not indicate a further downturn, but rather a flat market for a period.”
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