Earlier this year the Council of
Mortgage Lenders (CML), the trade association for
mortgage lenders in the UK, predicted that
house prices would remain level between 2005 and 2007. However, forecasts were today revised upward for both house prices and
mortgage lending for this period. This revision came following a recent flurry of market activity, backed by high
remortgaging levels.
In a marked change from earlier predictions, the Council of Mortgage Lenders forecasts a 4% rise in house prices this year, followed by 2% of annual growth over the next two years.
Property sales, although expected to decline gradually over the period, will not radically affect gross
lending, due to the high level of remortgaging.
However, the CML highlighted the fact that although its forecast has changed for the better, it was not expecting a sustained increase in market activity or house prices. The picture for the next two years appears to be largely neutral, despite small house price increases.
The CML also stressed the importance of the government's role in the property market. The unveiling of the equity release scheme in the Chancellor's pre-budget report was warmly greeted, but concerns remain over the government's controversial HIP (Home Information Pack) scheme. The CML called for the government to maintain an agenda that helps them to provide sustainable consumer benefits.
