Lenders expect mortgage arrears to more than double

| December 18, 2008 | 0 Comments
Lenders expect mortgage arrears to more than double

The Council of Mortgage Lenders (CML) is predicting that the number of mortgage borrowers three months or more in arrears with repayments will rise to 500,000 in 2009.

If so, the number of householders struggling to keep a roof over their heads will more than double, given that 210,000 mortgages are expected to be in arrears at the end of 2008.

In addition, the proportion of UK residential mortgages behind with payments would increase to 4.41%.

Lenders expect 2009 to be a very tough year because unemployment will rise. They are therefore sticking with an earlier forecast that 75,000 homes will be repossessed.

When it comes to house prices, the CML expects the fall to continue and 2009 sales to decline to 700,000, down from 900,000 in 2008 and 1.6 million in 2007.

The Council is not expecting any recovery in the housing market until the second half of 2009 at the earliest and net mortgage lending could therefore move into negative figures.

Returning to the expected rise in repossessions, the CML points out that its 2009 figure includes cases where properties are abandoned or where property fraud has been perpetrated, adding that a sizeable share are expected to be buy-to-let mortgages.

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