Brokers are closing the year in a bullish mood with optimistic predictions that total gross mortgage lending will top £200 billion next year, even higher than recent CML estimates.
The CML predicted on Monday that gross lending would rise to £195 billion in 2014, up 15% from an estimated £170 billion this year.
But Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), said this looks like a conservative estimate.
"It would be no surprise to see the annual total exceed £200 billion, with over one million transactions a given and an increasingly important role for brokers post-MMR.
"The withdrawal of the Funding for Lending Scheme will certainly have an impact on growth, but that impact will be lessened by improving credit conditions, strong consumer demand and the added momentum of Help to Buy."
Williams warned against the widespread assumption that this would inevitably result in a bubble.
"Even if 2014 brings £200 billion of gross lending, this would still be 10% less than in 2002 and little more than half the total recorded in 2007.
"Urgent attention is needed on housing supply, but the Office for Budget Responsibility’s house price forecast for 2018 still has real house prices 3.1% lower than at their 2007 peak."
Williams said we are still a long way from a fully restored and sustainable market. "Far from pressing the panic button, lenders must stay focused on offering reasonably priced and affordable mortgages while the construction industry ups its game to radically improve housing supply.”
Stephen Smith, director, housing and external affairs at Legal & General Network, called the CML £195 billion prediction "pessimistic", and also predicted at least £200 billion in gross lending.
"It is important to note that the UK market is still short of what we might regard as ‘normality’ and will remain that way until we see forecasts touch the £240 billion mark.”
National house price figures may point to a full recovery but the numbers are skewed by strong performance in London and the South East, Smith said. "For many other regions it is taking longer for improvements to be felt and we cannot say things are fully back on track until they return to positive territory too.”
Andy Frankish, new homes director at Mortgage Advice Bureau (MAB), said the market was responding to increased demand from newly-confident buyers.
"Added stimulus from government schemes such as Help to Buy have helped to revitalise consumer interest and chip away at homeowning barriers."
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