The Council of Mortgage Lenders (CML) has predicted that house sales next year will be at the lowest level since 1978 – the year that modern record-keeping began.
In a recent report, the CML said that it believed mortgage deals would be struck for just 825,000 properties in 2012 due to the continued economic climate, which looked likely to put off many potential house-buyers.
By the end of 2011, the council reckons that there will have been some 852,000 mortgage agreements made.
The “highly uncertain” nature of the UK housing market would not only leave house sales at their lowest ebb for 33 years, but could also lead to a rise in the number of repossessions – up to 45,000 from 37,000 in 2011.
The CML stressed, however, that there will still be less repossessions next year than there were in 2009 and far less than took place during the recession of the early 1990s in the UK. The ongoing commitment to low interest rates on the part of the Bank of England and other lenders will help see to that, it explained.
The organisation’s chief economist Bob Pannell commented: “The weak state of the wider economy and household finances creates a challenging and highly uncertain backdrop for the housing and mortgage markets.”
“Despite the fact that activity levels have already been subdued for several years, we have pencilled in a broadly flat picture – for both mortgage lending and property transactions – at least until real incomes show signs of stabilising as inflationary pressures recede.”