They are optimistic about a turnaround with market activity now picking up
Gross mortgage lending is expected to exceed initial forecasts this year, according to brokers surveyed by TMA Club.
The mortgage club said over 80% of its brokers anticipate higher borrowing levels than previously projected by industry experts.
Last year, gross lending fell by 28% to £226 billion as borrowers adjusted to escalating living costs, according to data from UK Finance. The trade body predicted a further decline to £215 billion for this year.
However, brokers are optimistic about a turnaround, with 20% predicting gross lending will surpass £251 billion in 2024 and another 60% estimating lending figures to range between £220 billion and £250 billion for the year.
“Inflation fears are receding faster than the Bank of England had been expecting and the latest indications from the governor Andrew Bailey suggest we may see a base rate cut later in the year,” said Lisa Martin (pictured), development director at TMA.
“That shift in the first three months of this year has boosted borrower confidence and advisers are seeing more engagement. “There are still affordability pressures, but lenders are definitely pricing to take market share and that’s keeping activity up.”
Despite the optimistic outlook from brokers, the response to the Spring Budget last month was lukewarm. TMA’s survey found that 95% of brokers felt the announcements did nothing to improve affordability for borrowers, particularly those looking to remortgage.
Brokers expect stronger lending to stem primarily from property purchases. Property listings website Zoopla reported a 15% increase in property sales and an 11% rise in buyer demand compared to last year, with a 21% increase in available homes.
“There is evidence that the housing market is back on track and brokers are seeing a rise in the number of clients looking to purchase, while remortgage activity remains steady,” Martin said.
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