The Council of Mortgage Lenders (CML) has downgraded its predictions about how many people will lose their homes in 2009, after new data showed the number of borrowers in arrears on their mortgage had fallen.
At the end of September 194,000 mortgages, 1.77% of the total lent to UK consumers, were in arrears of 2.5% or more of the outstanding balance of their home loan. This compares with 204,200 cases (1.86% of all mortgages) at the end of June.
The CML originally forecast that 75,000 repossessions would take place in 2009, but revised this figure downwards to 65,000 during the summer. Now the total number of repossessions expected by the CML has been cut to 48,000.
Homes being repossessed
If the CML’s latest forecast is correct, it will mean the total number of homes repossessed this year rises by 8,000 compared with 2008. This would be a far smaller increase than mortgage lenders and economists expected.
The CML says 11,700 properties were taken into repossession in the three months to the end of September, up slightly from 11,400 in the previous quarter. While this represents a 5% increase on the number of homes repossessed in the third quarter of 2008, it is still lower than the 12,700 homes taken back by lenders between January and March 2009.
Michael Coogan, CML director general, said: ‘We are glad to have been wrong on our previous forecast for mortgage repossessions this year. Low interest rates, and lenders’ forbearance policies, have helped to cushion many households facing financial problems.’
The CML also cited government measures as a key factor in keeping repossessions under control.
If you’ve fallen behind with your mortgage payments or are facing repossession, it’s important to seek advice as soon as possible. The Which? guide to repossession contains helpful tips on how to handle mortgage arrears, advice for negotiating with your lender and information on the government support that may be available to you.
Which? also offers useful advice on and sale and rent back schemes, which may appeal to vulnerable homeowners experiencing financial difficulty.
Meanwhile, our guide to recession-proofing your finances could help you deal with potential money problems before they arise.
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