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12 November 2009

CML slashes repossession forecast

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by Kay Mitchell

CML slashes repossession forecast

The Council of Mortgage Lenders (CML) has today revealed that there were 11,700 properties repossessed during the third quarter of the year – a rise of just 3% on the 11,400 homes repossessed in the second quarter of the year.

The figures have led the Council to revise its repossession forecast for the 2009 year. The CML is now predicting that there will be 48,000 homes repossessed this year – significantly cutting its original forecast of 75,000.

It is the second time this year it has trimmed its forecast and is also predicting that 53,000 homes will seized in 2010.

Should the CML’s forecast prove true, repossessions will have risen by just 8,000 compared to 2008.

It was originally feared that rising unemployment would lead to a sharp rise in repossessions but historically low interest rates, increased lender tolerance and Government rescue schemes are helping, said the CML.

CML’s director general, Michael Coogan, comments: “We are glad to have been wrong on our previous forecast for mortgage repossessions this year.”

“Although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession, unless interest rates rise from the low levels that most commentators now expect to persist for some time,” added Mr Coogan.

In the meantime, the Council also reported that at the end of September, 194,600 mortgages (1.77% of the total), were in arrears of 2.5% or more of the outstanding mortgage balance.

This compares with 204,200 cases (1.86% of all mortgages) at the end of June.

While the figure was still 29% higher than at the same point last year, the Council said the outlook for the property market this year and next was much better than before.

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