Mortgage lending to drop in 2024 - a silver lining fo...

It looks as if the rental market is set to stay strong for some years to come.

That’s because lending for house purchases will fall by eight per cent in 2024, according to trade body UK Finance.

It says higher interest rates and household costs would make it harder for people to reach eligibility levels to access mortgage credit.

However, the outlook for lending is expected be brighter for 2025.

UK Finance forecasts lending for house purchases in the UK would fall from £130 billion in 2023 to £120 billion next year.

It adds that there had been an estimated 4,400 repossessions in 2023, which it said was "an incredibly low number by historic comparisons".

Over 99 per cent of the 10.8m mortgages in the UK are not in arrears, thanks to strict affordability tests and low unemployment.

James Tatch, head of analytics at UK Finance, comments: "2023 was a challenging year for both prospective and existing mortgage borrowers, facing affordability pressures from higher interest rates and the increased cost of living, as well as house prices still at elevated levels relative to income.

"Most existing customers looking to refinance their loans chose to take a product transfer with their current lender, where affordability tests are not required."

The Bank of England makes its final base rate decision of the year this Thursday.