MPs to commence mortgage market inquiry

The Government has announced an inquiry into the UK mortgage market, focusing on arrears, repossession and access to mortgage finance.

The Treasury Select Committee will undertake the study which will look at the impact of the recession on existing and potential homeowners.

MPs will collect lenders’ statistics on current arrears and their forecasts for medium-term trends.

They will also consider access to mortgage finance and particularly the terms currently available to first-time buyers.

In the area of repossession, the committee will attempt to identify the characteristics of households that have either lost or are in the process of losing their homes.

Forecasts for repossession levels over the medium-term and the stance taken by mortgage lenders to homeowners in financial difficulties will be taken into account.

Sub-prime lenders and sale-and-rent-back firms will also be scrutinised by the Committee, which is expected to produce its report at the beginning of August.

According to the Council of Mortgage Lenders, repossessions could hit 75,000 in 2009 although the body is hoping to downwardly revise the figure after a gentler than expected first quarter of 2009.

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