Intermediary lenders are expecting business volumes from high risk lending, such as self certification and sub-prime mortgages, to ease slightly in the coming months, according to the Intermediary Mortgage Lenders Association.
The latest IMLA members survey also found most lenders expect mainstream and buy-to-let mortgage volumes to continue to grow.
Respondents to the survey say they expect self-cert volumes to fall by an average of 2% during the next three months and also expect light, medium and heavy adverse business volumes to fall by 1% or more.
However, lenders believe mainstream lending will grow by around 2.5% and buy-to-let business is expected to increase 3.6% during the next quarter.
Overall, intermediary lenders expect business volume to grow 2% by the end of 2007 and a further 2.8% in 2008, according to the survey.
However, a quarter of respondents say they expect business volumes to fall by around 5% during 2007, while 15% envisage the market falling in 2008.
Peter Williams, executive director of IMLA, believes there is still strong demand in the self-cert and adverse sectors and adds: “Lenders are re-pricing products and may indeed be pulling back slightly, but they still expect to write significant business volumes. Self cert and adverse accounts for around 40% of our respondents’ business, and there is no sign that the proportion will fall to any significant degree.”
Williams says the 2.8% growth expected in 2008 is relatively modest considering the 12.5% rate of growth between 2005 and 2006.
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