Mortgage lending is expected to top £316bn by the end of 2021 after house sales rose to their highest level since the financial crash.
In the UK gross mortgage lending is expected to peak this year at £316bn, up 31 per cent on 2020 as it receives a boost from the UK stamp duty holiday. Next year lending is expected to moderate to £281bn before increasing to £313bn in 2023, according to new data from UK Finance.
James Tatch, Principal, Data and Research at UK Finance, said, “2021 has been a bumper year for mortgage lending amid the stamp duty holiday and homeworkers moving from cities. The outlook for the housing and mortgage markets over the next two years is for a return to more stable, balanced picture following the upheavals of the last two years.”
Total house purchase transactions are expected to reach 1.5m in 2021, some 47 per cent higher than 2020 and the highest number since before the Global Financial Crisis. Buy-to-let activity has followed a similar trend to the residential sector, with purchase activity increasing to £18bn, up 83 per cent on 2020.
While housing market will inevitably soften in 2022 as the demand stimulus from the stamp duty holiday will no longer be a factor boosting house purchases other Covid-19-triggered behavioural changes could provide continued impetus according to the report which predicted a resurgence in homemover numbers following a decade of stagnation.