CML predicts steady volumes for 2016/17
The volume of residential properties to stay steady into 2016/17 according to predictions from The Council of Mortgage Lenders (CML).
According to the CML, there were approximately 1,219,000 residential property transactions last year, with their prediction for 2015 being 1,210,000.
For next year, the CML believes there will be some growth to 1,230,000 transactions with another slight growth of 1,260,000 into 2017.
However the CML are also predicting an increase in the value of transactions, with gross advances growing from £209 billion in 2015 to £230 billion and £261 billion in 2016 and 2017 respectively.
The report’s author, Mohammad Jamei wrote: “We saw a recovery in activity in the second half of 2015 after a slowdown associated with the implementation of the Mortgage Market Review affordability rules in April last year, and macro-prudential interventions two months after that.
“The government is adding more firepower in its efforts to promote activity in the housing market. This includes extending the Right to Buy scheme, Help to Buy ISA, Help to Buy shared ownership and the starter homes programme.
“It is difficult to gauge the overall impact of these, given that there can be considerable delays between policy announcements and delivery, the limited capacity for developers to expand rapidly and uncertainty about the extent to which some measures displace rather than add to overall activity.
“On balance we think these initiatives will exercise a progressive but only moderate stimulus from the second half of 2016 onwards.
“Firms are already aware of the closure of the Help to Buy mortgage guarantee scheme at the end of 2016 and have already begun to develop alternatives that support higher loan-to-value business. This is likely to help offset any associated dip in activity.
“There is a possibility that some house purchase activity is brought forward into the second half of 2016, to take advantage of the scheme before its closure.
“Looking ahead, we see only limited market growth potential over the next two years. The main factors restricting activity are the already elevated levels of house prices relative to earnings, regulation in the home-owner market, and uncertainty around buy-to-let.”