UK Mortgage Market 2017: Forecasts and Future Opportunities

2018-01-15
Price :
Published : Jan-2018
No. of Pages : 43
Table of Contents
EXECUTIVE SUMMARY 1
1.1. Market summary 1
1.2. Key findings 1
1.3. Critical success factors 1
2. THE MORTGAGE MARKET WITNESSED MODERATE GROWTH IN 2017 6
2.1. Gross mortgage lending is forecast to reach £327bn by 2021 6
2.2. Supply and demand factors will combine to ensure moderate future growth 7
2.3. Supply-side factors will increase the pool of funds available for lending 8
2.3.1. Regulatory changes have dampened the appeal of the buy-to-let sector 8
2.3.2. First-time buyers will benefit from the stamp duty land tax relief 9
2.3.3. The Help to Buy extension delivered a big boost to first-time buyers 10
2.3.4. The Shared Ownership and Affordable Homes Programme marks a decisive shift towards support for home ownership 12
2.3.5. Support for mortgages under the Funding for Lending Scheme will end in January 2018 13
2.4. Factors will exert both upside and downside pressures on demand 13
2.4.1. The government is taking a new approach to stimulating housing supply 14
2.4.2. First-time buyers get a boost from the Lifetime ISA 15
2.4.3. The UK economy will slow, modestly impacting demand for mortgages 16
2.4.4. Low consumer confidence will impact demand for mortgages 17
2.4.5. House-price growth is well below the pace of recent years 18
2.4.6. Rate rises will boost remortgaging activity in the short term 19
2.5. Brexit's potential impact on the mortgage market 20
2.5.1. Demand for home finance has been impacted 20
2.6. Industry stakeholders are embracing innovation to thrive in the mortgage market 21
2.6.1. MortgageGym aims to speed up loan applications 22
2.6.2. NatWest is the first provider to offer online paperless mortgages 23
3. NICHE MORTGAGES WILL EXPERIENCE VARYING FORTUNES 25
3.1. Government intervention will rein back buy-to-let lending 25
3.2. Shared equity activity will remain stable, driven by the Help to Buy scheme 26
3.3. Shared ownership growth will be supported by the Affordable Homes Programme 27
3.4. Right to Buy will grow moderately over the next few years 29
3.5. Equity release will see double-digit growth up to 2021 30
3.6. Regulatory changes will boost self-build lending 31
3.7. The secured lending market will accelerate after a disappointing end to 2016 32
3.8. Professional and graduate mortgages will continue to flatline 33
3.9. Islamic home finance will enjoy strong growth 34
4. PRODUCT VARIATIONS 36
4.1. Offset mortgage lending will grow in line with the overall market 36
4.2. Stamp duty changes are depressing large-value mortgage lending 37
4.3. Near-prime lending is expected to remain strong 38
5. APPENDIX 39
5.1. Abbreviations and acronyms 39
5.2. Definitions 39
5.2.1. BoE base rate 39
5.2.2. Gross advances 39
5.2.3. Remortgaging 39
5.3. Methodology 40
5.3.1. Future Sentiment Index 40
5.4. Bibliography 40
5.5. Further reading 41

List of Tables
Table 1: Stamp duty changes for first-time buyers 10
Table 2: Mortgage completions from October 2013 to December 2016, by type of borrower 11
Table 3: Mortgage completions from October 2013 to December 2016, by property value 11

List of Figures
Figure 1: Gross mortgage lending reached £245bn in 2016 7
Figure 2: The buy-to-let market has been more volatile given the recent tax changes 9
Figure 3: First-time buyer lending rose by 10% in Q1 2017 compared to the same period of 2016 12
Figure 4: The pace of new-build development is slow 15
Figure 5: Key macroeconomic indicators predict a slowdown in growth in the mortgage market 17
Figure 6: Consumer confidence recovered in early 2017, but slipped in October 18
Figure 7: UK house price growth is well below its recent average 19
Figure 8: Transactions fell in the immediate aftermath of the referendum and Brexit has potential for further impact 21
Figure 9: MortgageGym provides detailed insight into the range of mortgages available within 60 seconds 23
Figure 10: NatWest's digital mortgage offers can be made within 24 hours 24
Figure 11: Buy-to-let gross advances will record slow growth over the forecast period 26
Figure 12: Shared equity lending will grow at an average of 9% over the forecast period 27
Figure 13: Shared ownership has been boosted by the Affordable Homes Programme 28
Figure 14: Right to Buy lending will rise at a stable pace over the forecast period 29
Figure 15: Equity release lending will grow by 27% on average during 2017-21 30
Figure 16: The self-build market is set to grow between 5-7% over the forecast period 32
Figure 17: Secured lending will remain strong despite the new Mortgage Credit Directive 33
Figure 18: The lack of providers in the professional and graduate mortgage market will hold back growth 34
Figure 19: Rising awareness of Islamic finance will lead to growth in mortgage lending 35
Figure 20: Offset lending will hold its own in relation to the overall market 36
Figure 21: Large-value mortgage demand will come from wealthy foreign buyers 37
Figure 22: Near-prime lending will see impressive growth rates over the next few years 38
Filed in: Banking & Finance
Publisher : GlobalData