Ripley’s forecast was supported by Northern Rock who despite predicting a 17 per cent decline for the mortgage industry as a whole announced a rise in new lending of 7 per cent compared to last year.
Ripley said: “Lenders will have to inject a more innovative approach in order to secure a share of the market.”
Adam Applegarth, chief executive at Northern Rock, said: “We are very pleased to hold the current pipeline of new business at around the same level as at the start of last year’s pipeline.”
But he warned that its expectation for the gross mortgage market is likely to drop from £291 billion in 2004 to £260 billion in 2005.
Applegarth continued: “With this continued evidence of a slowdown in the UK housing and mortgage markets, our strong operating performance in the first quarter demonstrates the strength of our business model and our ability to deliver against our three key strategic targets – asset growth, profit growth and return on equity.”
Northern Rock’s new lending is dominated by home loans, which represents 90 per cent of total lending with remortgaging accounting for around 43 per cent of new residential lending in 2005.
Its quarter one total net lending was 54 per cent above the same period last year and residential net lending was 79 per cent higher than the same period in 2004.
Matthew Wyles, group development director at The Mortgage Works, said: “While net lending in the mortgage market is around 30 per cent down on the same period last year, there is still plenty of business for those players willing to compete for it.”
