CML property and mortgage forecast reaction
The Council of Mortgage Lenders (CML) property and mortgage forecast has been released this week, showing projected figures for 2015 and 2016.
From this data, the CML have revealed mortgage lending will continue to grow within the next two years. Though following a surge during 2013 and the first half of 2014, transactions will develop at a steadier pace – potentially resulting in a more stable market.
The CML market commentary states, “While we see a steady state for transactions around 1.2 million over the next two years, the OBR forecasts a return to longer term averages of around 1.4 million. This forecast also underpins the OBR’s strong growth in revenues from stamp duty over the forecast horizon and seems rather optimistic. Our view is that given the ongoing affordability pressures facing buyers, it is unlikely for the market to return to these levels.”
If the predicted steady market does arise, this will mean less pressure in terms of staffing levels for conveyancers, which has been a concern within solicitors firms of recent.
Chris Harris, Managing Director of Today’s Conveyancer commented, “This is a great opportunity for conveyancing firms across the UK. If the market remains steady, solicitors won’t be chasing staff, and focus can be transferred to looking at improving and enhancing the overall service offering.”
Mark Riddick, Chairman of Search Acumen, comments, “CML’s prediction that annual residential property transactions will stabilise at 1.180m in the next two years is no cause for complacency. The burst of activity this year whetted many conveyancing firms’ appetite for growth, so competition is sure to be intense in 2015. Any business that got its nose ahead in the rush will want to maintain that edge, while those that were caught out won’t want the same experience again.
“A 4% dip on 2014’s expected total of 1.225m transactions still amounts to a 10% rise on any other year since the financial crisis. Longer term growth hinges on tackling affordability issues. With the election now looming, the need for more homes and greater access to property is staring politicians in the face. Anyone with ambitions to form the next government will have to come armed with a credible plan to achieve these goals.
“As the parties finalise their manifestos, conveyancers should also be planning ahead. The next surge could be just around the corner, and ambitious firms will already be asking what will make them stand out and give them an advantage in the next phase of recovery.”