IMLA: “Housing and Mortgage Recovery Will Remain Robust.”

Detached House in North West, UK

The Intermediary Mortgage Lenders Association (IMLA) has today published its report on the impact of Covid on the UK housing and mortgage market – one year on. This latest report notes the continued strength of the housing market, despite the challenges presented by the pandemic, and predicts that gross mortgage lending will reach £285 billion this year.

In January, IMLA’s New Normal report predicted a rise in gross mortgage lending to £283 billion in 2021, with a swift return to household spending as Covid-19 lockdown restrictions were eased. However, IMLA’s latest report has revised this figure, increasing it to £285 billion – the highest level of mortgage lending since 2007.

The predictions follow data which show a surge in mortgage lending, stimulated by the strength of the housing market. During the first five months of 2021, lending for house purchase was not only 87 per cent above the same period the previous year, but 51 per cent above the same period in 2019. And while remortgage activity has been weaker, the number of product transfers has risen to record levels.

In light of the high levels of market activity brought forward by the Stamp Duty holiday, however, IMLA has also revised its forecast for gross lending in 2022, reducing it slightly from £286 billion to £280 billion.

The report, which makes a series of predictions about the market over the coming year, forecasts that house prices will be broadly flat in the second half of 2021 but will rise 1.6 per cent in 2022. House prices have risen as a result of the Stamp Duty holiday, but the report predicts that a more subdued picture can be expected after the holiday fully ends in September.

Kate Davies, executive director of IMLA, said: “Following a difficult period in the wake of the coronavirus crisis, it is very encouraging to see yet another positive prediction for the remainder of 2021. Our findings forecast that 2021 will see the highest level of mortgage lending since 2007 and, with a combination of Government support helping to underpin new purchases and a bumper year for product maturities, we expect this high demand to continue. However, with the Stamp Duty holiday soon coming to an end, and the Help to Buy scheme due to conclude in 2023, there is still a need for a coherent, long-term housing strategy from the Government that embraces the public as well as the private sectors – and delivers a market that meets Britain’s housing needs for the decades to come.”