CML downgrades 2009 repossession estimate to 65,000
The Council of Mortgage Lenders (CML) has updated its 2009 forecast for the UK housing market, reducing its estimate for repossessions from 75,000 to 65,000.
The body, whose members provide 98% of all residential mortgage lending in the UK, explains that while the housing and mortgage markets remain “extremely challenging” existing borrowers are benefiting from lower interest rates.
Other factors that should ease the number of homes taken back include “the significant levels of forbearance being shown by lenders” and government initiatives that support struggling homeowners.
The predicted rate at which mortgages run into arrears should also ease, with the Council now forecasting around 360,000 such cases by the end of 2009, or 2.5% of mortgage lending.
The CML’s forecasts for housing transactions and gross lending remain unchanged, at 700,000 transactions and £145 billion of gross lending this year.
However, the Council sees the outlook for net lending (gross lending with repayments and redemptions stripped out) as more positive than previously forecast, falling by around £5 billion, compared with the £25 billion decline previously anticipated.
In summing up the CML says: “The raft of measures taken by the authorities have stabilised the economy and will sow the seeds for a recovery over time, including in the housing market. But the improvement is likely to be slow and drawn out, especially as the extensive fiscal, monetary and credit support measures are gradually unwound.”