Mortgage rate trends and the housing market in 2012

Experts predicting mortgage rate trends at the Intermediary Mortgage Lenders Association believe that the weak state of the UK economy may have a serious impact on the housing market in next 12 months. Experts predict that no more than £130 billion will be lent, which is down from the £138 billion figure lent for 2011.

A poll conducted by the industry body for lenders found many of their members believe that inflation will fall by the end of 2012, by an average of 2.79 per cent, but this will have little difference on mortgage lending for the year. The last 12 months have not been kind to the UK housing market and prices have risen at a very slow pace.

Peter Williams, IMLA Executive Director, commenting on mortgage rate trends said: "The survey results may look negative but represent a realistic outlook for the year ahead and remind us that we are still in very challenging times for the economy. The mortgage market remains very limited which is why intermediaries can play such an important role to help inform consumers about the best products available and what is right for them.”

The National Association of Estate Agents in their prediction of mortgage rate trends believe that the UK housing market will see a gradual recovery over the next 12 months. Peter Bolton-King, the NAEA Chief Executive, said; "What we will see in 2012 is a continued increase in ‘micro-markets' across the country. Demand for property in some areas fuels a healthy market while other, less desirable areas, are in danger of being left behind. Even within the same town we see some types of property proving more popular than others.”