Lending volumes next year will return to normalised levels of 2002, the Council of Mortgage Lenders ...
Lending volumes next year will return to normalised levels of 2002, the Council of Mortgage Lenders (CML) has predicted.
The CML forecasts 4% growth in house prices in 2005, with gross lending of £271bn compared with £293bn in 2004.
While it expects a slowdown in the housing market over the next 12 months, the council believes this will be mostly because of a lower number of transactions rather than any widespread price reductions. Transactions are likely to total around 1.23 million next year, compared with an estimated 1.64 million this year.
Looking beyond 2005, the CML expects a continued slower market in 2006 and 2007.
The likelihood is the housing market is set for stable but slower levels of activity for some time, as the market adjusts from its recent exuberance, it said.
Jennet Vass, senior economist at CML, added: "Although our forecasts herald a slower market, there is good news here for first-time buyers over the longer term. Essentially, as earnings grow, houses are likely to become gradually more affordable again.
"Our house price forecasts expect continued subdued growth over the next three years. Although there may be some modest price falls in some areas, we expect the national average price growth to remain positive and do not envisage any dramatic market adjustment."