The trade association expects total loans to reach a high of £316 billion this year, a 31% increase over the previous year, then drop to £281 billion in 2022 before rebounding to £313 billion in 2023. Remortgaging is expected to be down somewhat from last year’s level of £62 billion, with home purchases (£200 billion, up 53% from 2020) being the primary driver for lending in 2021. With purchase activity climbing to £18 billion in 2019, an 83% increase, buy-to-let activity has followed a similar pattern to the residential sector. Principal, data, and research at UK Finance, James Tatch, stated:
Decrease in lending in 2022 as stamp duty expires
When compared to this year’s housing market, UK Finance predicts that the market will naturally weaken in 2022 due to a decrease in demand due to the stamp duty holiday, which expired in England and Northern Ireland in October and will no longer be a driving force behind home purchases. On this note, Tatch confirmed: He added: But other Covid-19-induced behavioral shifts, such as an increase in the number of people moving into their first house after a decade of stasis, are expected to give some further impetus in the future. Workplace flexibility is already ingrained in many firms’ longer-term practices, which means that for many house movers, a daily drive is no longer a significant concern; as a result, buyers are free to look into other locations for investing those funds. Nevertheless, UK Finance highlighted that the Coronavirus pandemic has created uncertainty in its projections and that the post-furlough job market scenario is still not fully clear.
