UK Finance predicting 10% increase in property purchase mortgage lending during 2025
UK Finance has published its housing and mortgage market forecasts for 2025 and 2026. With rate and cost pressures easing, the outlook for 2025 is for a gradual improvement in mortgage affordability, which will feed into market growth.
UK Finance, the organisation representing mortgage lenders, expects lending for home purchases to rise by 10% to £148 billion and the number of people remortgaging away from their existing lenders to increase by 30% to £76 billion.
Incredibly, the number of people sticking with their existing lenders when their mortgage rates end is due to rise by 13% to £254 billion, and buy-to-let mortgage lending will drop by 7% to £9 billion.
Upbeat forecast for 2025
UK Finance’s latest figures provide an upbeat forecast for 2025. Lower interest rates and easing ‘cost of living’ pressures will lead to greater mortgage affordability and buying activity.
The organisation says its predictions are based on a good 2024, which, although it saw activity well below previous years, 2025 should see considerable rises in mortgage lending as economic confidence returns.
Source: UK Finance
Anthony Emmerson, director of Trinity Financial, says: "We are optimistic about the upcoming year, especially as lenders are keen to issue more mortgages. However, there are things to be concerned about, particularly with Donald Trump becoming president again in a few weeks, potential trade tariffs, how they will affect our inflation position here in the UK, and the ongoing wars.
“I still expect the Bank of England base rate to come down a few times this year and mortgage rates to edge down, boosting the property market and making mortgages more affordable. 2025, in particular, has a higher number of remortgages coming up for renewal, and the sooner borrowers can secure a rate, the better. We consistently swap our clients to cheaper rates when they come down, but the important thing is to get a deal agreed.”
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The information contained within was correct at the time of publication but is subject to change.
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