Leading economist expects 90,000 repossessions this year
The managing director of economic forecasting agency, Capital Economics, has predicted that mortgage repossessions could rise to 90,000 during 2009.
Roger Bootle, a former chief economist of HSBC, made the gloomy forecast earlier this week, when delivering a speech at the Chartered Institute of Housing South East’s Annual Conference and Exhibition, in Brighton.
He also warned that around 3.5 million households could fall into arrears with their mortgage repayments (twice the level seen in the early 1990′s downturn) and that house prices could complete a peak-to-trough fall of between 40% and 45%.
According to Mr Bootle, the country is in the biggest housing bubble ever seen and there is a long way to go before the market stabilises.
While a correction on this scale would ease affordability in relation to average earnings, any positive effect of this would be mitigated against poor access to finance.
In addition, Mr Bootle suggested that the UK’s culture of homeownership should be seen as part of the problem.
The economist paints a picture of the UK housing market struggling against the backdrop of the worst economic downturn since 1945 to 1948, with recovery from recession progressing only at a very slow rate, from 2011.