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Sunday 23rd of August 2009
August 21, 2009

Lenders optimistic on arrears and repossessions


by Gill Montia
”Lenders

In its latest commentary on the UK housing market, the Council of Mortgage Lenders (CML) describes the recovery seen in recent weeks as “fragile” and warns of a “modest dip” towards the end of the year, reflecting seasonal factors.

More positively, second quarter data for arrears and repossessions suggest that fewer borrowers are struggling financially than had been feared, despite a modest rise in the figures.

The CML’s therefore says its forecast of 65,000 properties to be taken into possession in 2009, and 360,000 borrowers to be in arrears by the end of the year “may now prove rather pessimistic”.

According to the lenders’ body, historically low interest rates have created “considerable breathing room” for struggling homeowners and with the Bank of England expected to keep rates at or near current levels for some considerable time, the respite should continue.

On this note the Council draws attention to the mortgage interest component in the July Retail Prices Index, which shows an incredible 45% reduction in the cost of debt servicing from a year ago.

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