The mortgage industry is widely expected to hit £130bn in lending this year, which would mean gross lending would need to equate to around £10.6bn per month for the remainder of the year.
Bob Pannell, chief economist at the Council of Mortgage Lenders, says a number of high profile events such as the Olympics could distort the market over the coming months and it will not be able to make a more accurate assessment of the market until autumn.
He says: “The government has recently announced a number of measures to counter the adverse effects from the euro zone crisis. It clearly senses an opportunity to bolster home ownership and housing activity, and we look forward to hearing more details about the funding for lending initiative which seeks to deliver this.
“Meanwhile, mortgage lending continues to seesaw, albeit against a broadly flat market. Unfortunately, a number of one-off factors, such as the Diamond Jubilee and the Olympics, are set to distort market indicators over the coming months, and it may be the autumn before we can more accurately gauge the state of the market.”
David Brown, commercial director of LSL Property Services, says if the Bank’s funding for lending scheme is a success, banks could increase their lending substantially in the coming months.
He says: “The number of first-time buyers able each get on to the property ladder has been bumping along the bottom since the first crunch, boosting tenant competition, but if the new funding for lending scheme is a success, this could well improve in the second half of the year.”