Gross mortgage lending is projected to total £285bn for 2021 – the highest level of lending since 2007, according to the Intermediary Mortgage Lenders Association (IMLA).
Back in January IMLA was projecting gross lending of £283bn as COVID restrictions eased.
However, the new predictions follow data that shows a surge in mortgage lending, stimulated by the strength of the housing market.
Atom Bank passes £3bn mortgage completions
The figures come as part of an IMLA report looking at the impact of COVID on the UK housing and mortgage market – one year on. The report shows that during the first five months of 2021, lending for house purchase was not only 87% above the same period the previous year, but 51% above the same period in 2019.
And while remortgage activity has been weaker, the number of product transfers has risen to record levels.
The report also sees IMLA revise its forecast for gross lending in 2022, reducing it slightly from £286bn to £280bn.
The report, which makes a series of predictions about the market over the coming year, forecasts that house prices will be broadly flat in the second half of 2021 but will rise 1.6% in 2022.
Kate Davies (pictured), executive director, IMLA, said: “Following a difficult period in the wake of the coronavirus crisis, it is very encouraging to see yet another positive prediction for the remainder of 2021.
“Our findings forecast that 2021 will see the highest level of mortgage lending since 2007 and, with a combination of government support helping to underpin new purchases and a bumper year for product maturities, we expect this high demand to continue.
“However, with the Stamp Duty holiday soon coming to an end, and the Help to Buy scheme due to conclude in 2023, there is still a need for a coherent, long-term housing strategy from the government that embraces the public as well as the private sectors – and delivers a market that meets Britain’s housing needs for the decades to come.”