UK housing and mortgage markets through are set to experience growth through 2026 and 2027, the Intermediary Mortgage Lenders Association (Imla) predicts.

The association suggests growth will come from rising lending volumes, supported by falling interest rates, improving affordability and easing mortgage regulations.

IMLA forecasts that gross mortgage lending will increase to £320bn in 2026, rising a further 9% to £350bn in 2027, up from an estimated £288bn in 2025.

House purchase lending is expected to be the main driver of growth, reaching £205bn in 2026 and £225bn in 2027, while remortgaging is forecast to rise to £103bn and £110bn respectively as interest rates fall and affordability improves.

Elsewhere, it forecasts that gross buy-to-let (BTL) lending is forecast to rise from an estimated £39bn in 2025 to £44bn in 2026 and £48bn in 2027, supported by rising rental yields and increased market churn exacerbated by the Renters Rights Act.

BTL house purchase lending is projected to grow to £12bn in 2026 and £14bn in 2027, as more amateur landlords exit the market, often to be replaced with more professional operators.

Imla says the housing market is expected to remain one of the strongest-performing areas of the UK economy.

It suggests that average house prices are set to rise by 3.0% in 2026 and 3.1% in 2027, alongside an increase in transactions to 1.25 million and 1.32 million respectively.

Mortgage arrears are projected to continue falling over the period, which Imla says reflects improved affordability and the completion of the upward repricing of existing mortgage books.

Meanwhile, Imla forecasts that around 87% of regulated mortgage lending will continue to be conducted via the broker channel across 2026 and 2027.

Imla executive director Kate Davies says: “The housing and mortgage markets continue to play a vital role in supporting the wider UK economy, and our forecasts show that they are set to remain a source of resilience and growth through 2026 and 2027.”

“Falling interest rates, rising transaction levels and a recovering buy-to-let market all point to a more positive outlook for lending activity.”

“As the market grows and becomes more complex, the importance of intermediary advice is greater than ever. Intermediaries play a crucial role in helping borrowers and landlords navigate affordability, regulation and product choice, while supporting good outcomes across both the owner-occupied and buy-to-let sectors.”

Last month, Imla elected its new management committee for 2026, with Coventry Building Society head of intermediary relationships Jonathan Stinton appointed as chair.