LONDON - Market analyst Datamonitor has said that the rate at which homeowners apply for loans secured on their property is on the wane and could decline significantly over the next few years. The market for secured loans is set to grow at 5.3 percent a year between 2005 and 2009, the firm said. Datamonitor said that the reining in on loans is an extension of the "soft landing" for the UK housing market.
The predicted growth over the next five years is significantly less than the past five years when the market had registered a 50 percent increase. Maya Imberg, financial services analyst at Datamonitor and author of the report said, "As the UK's housing market slows to a soft landing, the rapid growth rates the secured lending market has enjoyed over the last five years are set to cool."
Her statements hold water since the UK house price inflation has fallen for the peak of 20 percent in the middle of last year to the 2.5 percent in August, according to the figures from Halifax. "If the secured loan market can overhaul its current image to mainstream consumers; the market, and in particular, mainstream lenders, are likely to see substantial growth," Imberg said in the report.
Last year, the secured loans market was worth £32.6 billion. This figure is set to leap to £35.4 billion a year by 2009, according to Datamonitor. Usually, loans secured against property are ploughed back into homes for their improvement. This report's findings were given a boost by a recent report from the Centre for Economic and Business Research, which said that property prices in the UK would not change much over the next five years.
Datamonitor also said that mainstream lenders were embracing the secured loans market in a big way. Ocean Finance and Freedom Finance are the two big names in the lending business, but Halifax and Barclays have also joined the bandwagon in recent times.
Posted
on : Fri, 16 Sep 2005 17:55 GMT | Loans News
By : Anne Philips
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