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14th Dec 2021|News|Sales|Lettings|

2021 a record year for mortgage lending

Gross mortgage lending should set a new record of £316bn in 2021, an increase of 31% from 2020, according to reports from leading financial service firms.

House purchase activity has been the main driver (£200bn, up 53% on 2020), while homeowner remortgaging activity will be slightly down on last year at £62bn.

Buy-to-let lending is expected to rise by 83% year-on-year to £18bn this year.

However, the market should cool next year, with £281bn of lending projected in 2022, before rising to £313bn in 2023.

This is due to the removal of demand stimulus from the stamp duty holiday.

Marc Dueck, Director at ME Financial Services said, ” We certainly feel there will be a lot of stability bought back to the mortgage lending market in 2022. Smaller deposit mortgages are becoming much more accessible and competitive.

We have also seen more consistency in clients with variable pay such as bonus and commission now working from home and employment is becoming more stable. Lenders are being more flexible in considering these income types meaning people can access mortgages they require.
Where BTL lending is concerned, it will be interesting to see how the EPC changing in Dec 2025 will affect the market. Landlords may wish to raise capital against their existing portfolios to fund necessary changes to maybe sell properties altogether, to invest in more eco-friendly properties.”

ME Financial also predicted the resurgence of homemover activity to continue firing up the housing market going forward.

This is because of changing attitudes around working from home, with many businesses integrating this into their longer-term policies.

Refinancing activity will pick up modestly next year but accelerate somewhat in 2023, as higher volumes of fixed rate deals, including five-year deals taken out in 2017, are set to end and the loans become eligible for refinancing.