UK Mortgage Market 2016: Forecasts and Future Opportunities, 2020 - Gross Lending will Rise to 287.2 Billion by 2020 - Research and Markets

DUBLIN--()--Research and Markets has announced the addition of the "UK Mortgage Market 2016: Forecasts and Future Opportunities" report to their offering.

2016 has been a good year for the market, with gross lending expected to be 12% higher than in 2015. However, market conditions over the next few years are predicted to dampen prospects for future growth. On the supply side, legislative changes in the buy-to-let sector, namely higher rates of stamp duty and more stringent underwriting requirements, will act as a drag on future growth in what has been the standout sector in the years since the financial crisis. On the demand side, economic uncertainty caused by the Brexit vote will reduce the willingness of consumers to take on more debt.

Key Findings

- Buy-to-let lending, the outstanding success story of recent years, will suffer a reversal of fortune due to adverse changes in stamp duty, tax relief, and underwriting criteria. Following a rush by investors to beat the April 2016 increases in stamp duty, new lending in the latter part of the year has been lower than in 2015, and the market will flatline in subsequent years.

- 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. During 2016-21, an estimated 135,000 shared ownership homes will be built under this scheme, thus fueling a boom in associated mortgage lending.

- 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.

Key Topics Covered:

1 Executive summary

2 The Mortgage Market Witnessed Strong Growth In 2016

Gross lending will rise to £287.2bn by 2020

Supply and demand factors will combine to deliver sustained growth

Supply side factors will ensure stable growth in mortgage availability

  • Tighter underwriting standards in the buy-to-let sector
  • Help to Buy schemes continue to generate business among first-time buyers
  • The MCD will have a limited effect on the market
  • Regulatory intervention has reduced the availability of high LTI deals
  • Brexit's potential impact on the mortgage market

2.4. Macroeconomic factors point towards a modest increase in demand

  • An uncertain economic outlook will dampen demand beyond 2016
  • Consumer confidence dropped sharply, but quickly recovered after July 2016
  • Ongoing low interest rates continue to depress remortgaging activity
  • Low mortgage rates will boost consumer demand for mortgages

There is plenty of scope for innovation in the mortgage market

  • Habito brings robo-advice to the UK mortgage market
  • Trussle offers a hassle-free way to get a mortgage

3 Niche Mortgages Will Gain Traction Over The Forecast Period

  • Buy-to-let lending will consolidate and growth will fall to a more sustainable level
  • Shared equity activity will grow strongly over the next few years
  • Shared ownership will be massively boosted by the new Affordable Homes Programme
  • Right to Buy mortgage lending will grow convincingly over the forecast period
  • Equity release is well placed and prospects for the market are improving
  • Self-build lending is expected to grow slowly but steadily over the next few years.
  • Secured lending will see stable growth over the next few years
  • Professional and graduate mortgage lending is stagnating
  • Islamic home finance remains on course for further strong growth

4 Product Variations

  • Offset mortgage lending will flatline over the next few years
  • Growth in large-value mortgage lending will be impacted by stamp duty changes
  • Near-prime lending has outperformed the rest of the market in 2016 and will continue to grow

5 Appendix

For more information about this report visit http://www.researchandmarkets.com/research/wq3w3v/uk_mortgage

Contacts

Research and Markets
Laura Wood, Senior Manager
press@researchandmarkets.com
For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716
Related Topics: Mortgages

Contacts

Research and Markets
Laura Wood, Senior Manager
press@researchandmarkets.com
For E.S.T Office Hours Call 1-917-300-0470
For U.S./CAN Toll Free Call 1-800-526-8630
For GMT Office Hours Call +353-1-416-8900
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716
Related Topics: Mortgages