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2011 prediction is gross lending flat, net lending down

The Council of Mortgage Lenders is forecasting that gross lending will remain static at £135bn in 2011, but that net lending will drop from £9bn
this year to £6bn.

In a market update last week the CML says: “We do not envisage a return to the lending levels that characterised the middle of the last
decade for many years to come.”

Halifax is forecasting that house price rises will remain static in 2011 but that interest rates will reach 0.75% by the end of next year. In the lender’s market outlook, Martin Ellis, chief housing economist at Halifax, says government schemes have filled the gap left by the contraction of money markets.

But he adds: “At the same time, banks have to boost capital and liquidity reserves. So they will need to be able to refinance wholesale debt and build strength in their balance sheets and liquidity provisions to maintain mortgage availability.”

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Pot Follows Member – or does it?

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