Market performance this year will be greatly influenced by several key variables, such as the housing white paper
The UK housing market has shown encouraging signs of late.
Gross lending activity ended 2016 on a positive note at £246bn – an increase of 12 per cent on 2015’s total.
Approvals for house purchases have also recovered strongly over the past few months, which should feed through to lending figures early this year.
Our forecasts for 2017 may be less bullish than a year ago as economic uncertainty weighs on the market but we still predict 1.2 million transactions and a slight increase in gross lending, to £248bn.
The buy-to-let sector may be a special case, given all the regulatory and taxation changes taking place.
That said, market performance is never certain and it will be greatly influenced this year by some key variables.
First, with regard to the housing white paper released last week, lenders already contribute to the funding of private and social rented housing, as well as owner occupation, so we welcome and are comfortable with the cross-tenure approach.
We are now ready to work with the Government, and with CML members and other parties, on the detailed implementation of these proposals.
We want to play our part in developing a coherent, long-term plan to deliver more housing for the UK and help ensure that it is durable, affordable and in the locations and tenures that people want.
Second, regulatory developments are as likely as ever this year. We have the FCA’s review of market competition in the first half of the year, as well as its continuing analysis of the industry for older consumers.
Third, Brexit. Our industry is relatively well insulated compared to others: activity is primarily domestic, not cross-border. As such, the mortgage market has remained resilient to any pressures and we stand ready to work with the authorities to provide input on how it may be affected as more details emerge.
Finally, this year will bring some significant developments for the Council of Mortgage Lenders as we merge with other bodies to create a new financial services trade association.
It is our firm resolution that the new body will serve the lending community every bit as effectively as the CML has done since 1989.
Paul Smee is director general at the Council of Mortgage Lenders