Looking forward to 2006
In light of a recovering housing market in the second half of 2005 and the continuing high level of re-mortgaging, the Council of Mortgage Lenders (CML) has revised its predictions for 2006-07 and now expects house prices to rise by 4% this year and by 2% annually over the next two years.
So while property sales will probably remain flat, the current trend to re-mortgage will ensure that gross lending remains buoyant.1
However the CML expects modest house price growth rather than a great surge.
That being said, Governement policy will play a crucial role in shaping the final outcome and delivering its aspiration that 75% of UK families become homeowners. The industry welcomes the announcement of a shared equity initiative involving lenders and of measures to increase the supply of property over time.
Contribution owner occupation (shared purchase) is likely to promote long-term security and social and economic welfare. As for business, intermediaries can look forward to a healthy re-mortgage market and the prediction by the Centre for Economics and Business Reserach that the buy-to-let sector looks set to grow by 40% over the next ten years.2
- CML report http://www.cml.org.uk/cml/media/press/602 dated 6th December 2005
- Based on a combination of government policy and demographic factors