CML: Repossessions 'not as bad as feared'
A wave of repossession expected to hit on the back of higher unemployment will be less severe than feared, the Council of Mortgage Lenders has said.
Better-than-expected: stemming the number of homes being repossessed.
The group has cut its forecast of the number of homes it expects to be repossessed in 2009 from 75,000 to 65,000.
The new figure is still the highest since 1992 and compares with 40,000 repossessions in 2008.
The C
The CML also lowered its forecast for the number of mortgage borrowers falling into mortgage arrears of at least 2.5% of their outstanding debt.
The CML said it expected 360,000 people to fall into arrear, 15% lower than the previous forecast, but still way above last year's number of 182,600.
Low interest rates in particular were keeping borrowers out of arrears – making it easier for households that had lost a chunk of their income to repay the mortgage and slowing the rate at which arrears built up.
Government and industry initiatives, such as improvements in support for mortgage interest and the Homeowner Mortgage Support scheme, under which people can defer up to 70% of their interest for up to two years, were also helping people to stay in their homes, the CML said.
The CML also revised its forecast for net mortgage lending, which strips out redemptions and repayments, during the year.
It now expects this measure to be broadly stable at minus £5bn, meaning homeowners repay £5bn more to lenders than they borrow, a considerable improvement on its previous forecast that net lending would be minus £25bn during the year.
But its prediction for total advances remains unchanged at £145bn due to the subdued remortgage market, as homeowners either opt to stay on their lender's lower standard variable rate or do not have enough equity in their property to meet the new tougher lending criteria.
The CML said despite some encouraging signs in the housing market, it was too early to be sure that a recent run of positive data signalled the start of a robust recovery.
It added that the lending industry also still faced considerable challenges in increasing the supply of mortgages available.
It said: 'Commitments made by some of the large players are unlikely to fully offset the loss of capacity elsewhere. Given also the weak economic backdrop, housing transactions are likely to remain subdued for some time.'
As a result, it is continuing to predict only 700,000 homes will change hands this year, down from 905,000 in 2008 and 1.6m in 2007.
Most watched Money videos
- The new Volkswagen Passat - a long range PHEV that's only available as an estate
- Mini Cooper SE: The British icon gets an all-electric makeover
- Mail Online takes a tour of Gatwick's modern EV charging station
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Leapmotor T03 is set to become Britain's cheapest EV from 2025
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Watches of Switzerland defies luxury slowdown with...
- Barclays and HSBC cut mortgage rates: Is the tide turning?
- Drivers are being stung at the pumps by fuel retailers...
- Ambrosia owner Premier Foods profits boosted by...
- EasyJet boss to step down as airline reveals it raked in...
- BT Group ups dividend despite losing almost...
- Superdrug unveils plans to open 25 new stores this year -...
- Reality TV stars charged by City watchdog over...
- Time to wind back the tourist tax, says Watches of...
- Sage Group shares suffer 'hyperbolic' sell-off as group...
- United Utilities revenues near £1.9bn thanks to higher...
- Future shares jump after publisher declares £45m share...
- The future of the Royal Mail is not just a matter for the...
- Stock market chief insists there is a 'strong cause for...
- BUSINESS LIVE: BT to boost free cash flow; EasyJet CEO to...
- David Beckham teams up with Hugo Boss to design menswear...
- MARKET REPORT: Dow Jones tops 40,000 as investors bet on...
- Turbulence at Easyjet as boss stands down sending share...