UK Mortgage Market 2017: Forecasts and Future Opportunities

Published: January 2018
No. of Pages: 43
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UK Mortgage Market 2017: Forecasts and Future Opportunities

Summary

While the market has recovered well since the financial crisis, often growing by a double-digit percentage year-on-year, rising economic uncertainties will dampen the prospects for future growth over the coming years. During 2017-21, gross advances are expected to record a CAGR of 5.7%, reaching £327.0bn by the end of the forecast period.

On the supply side, an increased supply of new homes, stamp duty relief for first-time buyers, and tighter controls on buy-to-let lenders will improve matters for first-time buyers by reducing investor demand for properties. Legislative changes in the buy-to-let sector such as higher stamp duty and stricter underwriting standards will act as a drag on future growth, in what has been the standout sector in the years since the financial crisis.

Political uncertainty arising from the Brexit negotiations has dampened the economy’s prospects. At the same time, real wages are shrinking as annual pay increases fail to keep pace with rising inflation. Combined with the rapid growth in consumer credit and ensuing high levels of household debt, this will limit the capacity of consumers to take on significantly higher levels of mortgage debt.

This report offers five-year gross lending forecasts for residential and niche mortgages up to 2021, along with a detailed examination of the various demand- and supply-side factors that will determine the market outlook. It offers insight into -
- The key macroeconomic, regulatory, and other factors that will drive the demand for and supply of mortgages over the next five years.
- The outlook for niche sectors, including buy-to-let, equity release, shared ownership, shared equity, and self-build.

Scope

- The impressive growth in buy-to-let lending as seen over the last few years has come to a sudden halt, and is unlikely to resume in the near future.
- Equity release continues to enjoy much success, with lending showing significant year-on-year growth. Prospects for further growth are healthy, with several years’ worth of property price rises leaving borrowers with plenty of capital value to unlock, while the cost of equity release products is falling.
- Lending on shared ownership properties will see huge percentage increases over the forecast period, largely off the back of the government’s new Affordable Homes Programme 2016-21. An estimated 135,000 shared ownership homes will be built under this scheme, thus fueling a boom in associated mortgage lending.

Reasons to buy

- Develop more targeted strategies through the analysis of key mortgage market developments.
- Inform your future plans with our five-year forecast of gross advances for niche product lines.
- Analyze trends with details of historic gross advances across a range of specialist mortgage sectors and product types.
- Benchmark yourself against competitors and ensure you remain competitive as new innovations begin to enter the market.
- Be prepared for how regulation will impact the mortgage market over the next few years.

Published By: GlobalData
Product Code: GlobalData42315


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