Ongoing problems in the eurozone, regulatory changes, and rising costs in the wholesale markets will constrain the supply of funding. The biggest single factor is the trend towards deleveraging as lenders come under greater pressure to increase their capital reserve ratios.
The demand for mortgages will remain weak in 2012 because of low consumer confidence, concern over the state of the economy, and the cost and availability of lending. A combination of a shortage in supply and lacklustre demand means that gross lending looks set to remain depressed over the short and medium term.
A new forecasting model better accounts for the key factors affecting the demand for mortgages and the supply of mortgage lending, and assesses their relative importance to determine the magnitude of their impact on the market in 2012 and beyond. Datamonitor offers a main gross lending forecast and a separate worst case scenario forecast.
Gross mortgage lending was depressed in 2011 and pointed towards a fragile and uncertain market. Key demand-side and supply-side factors have continued to deteriorate in 2012, heightening the need to analyze the outlook for the mortgage market. A lack of funding will restrict the ability of providers to increase lending, and demand will be adversely affected by low consumer confidence.
Features and benefits
