The Council of Mortgage Lenders (CML) has revised upwards its forecasts’ for house prices and homeowner loan lending over the next two years.
The CML said that it was re-examining its figures’ in the light of higher than expected re-mortgaging as homeowners search for the best mortgage rate.
Greater than expected levels of housing market activity had also been a factor, said the CML, as potential buyers compare mortgage rate deals and prices and decide to enter the market.
The CML had originally anticipated a flat housing market over the period 2005 ñ 2007, but had raised this estimate to four per cent house price growth this year, and two per cent annually over the next two years.
High levels of re-mortgaging as homeowners compare mortgage rates will compensate for a declining number of property sales, from 970,000 this year to 920,000 annually in 2006 and 2007.
The CML added that it did not expect any great resurgence in the housing market.
“Just as importantly, we do not see any dramatically worsening arrears or possessions picture,” said CML chairman Stuart Bernau at the organisations annual conference.
“While possessions may continue to pick up modestly over the next few years, they will remain substantially below the long-term trend.”
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