EY ITEM Club forecasts rising demand for mortgages this year

February 26, 2024 by Heidi

Lenders

The economic forecasting organisation EY ITEM Club has stated that it believes there will be a rise in the level of demand for mortgages during 2024, driven by interest rates continuing to fall.

Growth of 2.2% in overall mortgage lending has been predicted for this year by the organisation. In large part that optimistic assessment is being fuelled by the likelihood that the base rate will be brought down by the Bank of England (BoE). It currently sits at 5.25%, having been increased on a number of occasions last year in an attempt to control inflation, but is expected to be down to 4% by the time 2024 comes to an end.

At the moment inflation levels in the UK are staying at the same 4% level. Increases in the costs of both electricity and gas have been balanced out by the fact that things like groceries and furniture have dropped in price.

There are issues that could potentially work against this positive mortgage demand forecast. Primarily the recession that the country entered this month, with the news that the final quarter of last year saw the second successive contraction in gross domestic product.

However, EY ITEM Club stated that GDP is due to go up during 2024 and across the following two years. It added that this recovery for the UK economy is what lies behind its optimistic predictions for mortgage demand.

This certainly presents a picture that professionals who have the CeMAP mortgage advisor qualification will find quite encouraging.