THE chief executive of Skipton Building Society said he would not be surprised to see UK house price growth of 10 per cent.
David Cutter’s comments came after a Bank of England survey showed this week that lenders anticipate a significant increase in the availability of mortgages in the first quarter of the year.
The central bank’s quarterly Credit Conditions Survey said lenders reported that demand for secured lending – essentially mortgages – rose at its fastest pace in the fourth quarter since the survey began in 2007.
“Lenders expected the availability of secured credit to significantly increase in 2014 Q1, including for those borrowers with a LTV (loan to value) ratio above 75 per cent and 90 per cent,” the BoE said. The Government launched its Help to Buy plan in October, helping homebuyers to put down a deposit of as little as five per cent.
Mr Cutter said: “Many of the findings in this survey chime with our own experiences. In 2013 we saw our new residential lending increase by over 50 per cent compared to 2012. And looking ahead we plan to see continued growth in 2014.
“Our indications, via our national estate agency Connells Group, indicate that based on current trends, increasing buyer demand, reduced stock levels, lender appetites, and new builds being below required levels, we would not be surprised to see UK house price growth of 10 per cent this year.”
Kim Rebecchi, sales and marketing director at Leeds Building Society, said: “There is no doubt that there was an ‘air of optimism’ around the mortgage market in the second half of 2013 as higher loan-to-value mortgages became more widely available. That momentum and confidence will be brought into this year.”
Ms Rebecchi said that whilst she anticipates an upbeat 2014, it is not without its headwinds, and the modification of Funding for Lending so that it targets business lending only, for example.
But she said, “... there is a very good chance that we will return to healthier levels of net lending”.