Mortgages

Mortgage lending to rise by 1.2% in 2023 as UK avoids recession: EY


House money pound price growth

“The recession that many thought was inevitable is now likely to be avoided and energy prices have fallen, boosting consumer and business sentiment.”

Net mortgage lending is now expected to grow 1.2% in 2023, up from 0.4% predicted in February, according to the latest EY forecast.

Banks are expected to increase their lending this year as the UK economy swerves the predicted recession and the housing market shows small signs of some revival, according to a panel of economists.

Total loans in the UK are expected to rise 1.2% this year, a net increase of £29bn, upgraded from a 0.1% fall forecast in February, the forecast shows. Falling inflation, lower-than-anticipated energy bills and a resilient jobs market mean UK GDP is expected to increase by 0.2% in 2023 rather than contracting, driving an increase in consumer and business borrowing.

The crisis rippling through the US banking sector has also so far had “limited impact on the UK’s highly capitalised lenders”, EY’s economists added, though they said risks to the downside are “present within the forecast”.

Laimonas Noreika, founder of HeavyFinance, commented: “With the UK’s improved economic set to see bank lending surging, companies have a new opportunity to invest, grow and develop more sustainable business models. As the global race to increase low-carbon green investment continues, UK firms need to think again about the steps they can take to reduce C02 emissions.

“The wider industry needs to consider how to use external finance to further improve key areas like agriculture and farming, modernising processes as well as saving time and money.”

Sjuul van der Leeuw, CEO of Deployteq, said: “With banks increasing access to finance, UK businesses will have the opportunity to access the funding they need to invest and grow the skills of their workforce. As confidence in the economy recovers, key to SMEs achieving rapid growth will be looking again at key tools like automation and effective marketing platforms to empower staff and win new customers.

“Ambitious businesses cannot afford to operate a ‘business as usual’ approach when it comes to important areas of development like marketing and new business. Turbocharging growth requires the latest technology platforms, enabling businesses to reach new customers and increase their market share.”

Anna Anthony, UK financial services managing partner at EY, added that the UK is “still on the path to economic recovery” but we are “in a more optimistic place than we were a few months ago”.

She continued: “The recession that many thought was inevitable is now likely to be avoided and energy prices have fallen, boosting consumer and business sentiment. Despite recent volatility in the global banking sector, the EY ITEM Club has been able to upgrade its growth forecasts for UK bank lending this year, which is positive news.”





Source link

Leave a Response