Repossessions forecast to hit 'only' 130 families a day

Published on Thursday 12 November 2009 21:21

THE forecast number of people who will lose their homes this year has been slashed by more than a third by the Council of Mortgage Lenders.

The group expects 48,000 properties to be repossessed in 2009, after a combination of low interest rates, government help and lender forbearance helped people struggling with their mortgages to stay in their homes.

Although the figure is well down on the CML's original prediction of 75,000, which was revised down to 65,000 in June, it is still the highest number since 1995.

The revised forecast came as the group released figures showing the number of people who had their homes repossessed rose by only 3 per cent during the third quarter of the year, despite rising unemployment.

Around 11,700 homes were taken over by lenders during the period, up from 11,400 during the previous three months, but down on the first quarter's total of 12,700.

There was also a fall in the number of people who fell behind with their repayments.

Around 194,600 people were in arrears of at least 2.5 per cent of their outstanding mortgage at the end of September, the equivalent of 1.77 per cent of all mortgage customers, down from 204,200 or 1.86 per cent at the end of June.

The CML said it expected 195,000 people to be in arrears at the end of this year, down on its previous forecast of 360,000.

It is also predicting there will be only a modest deterioration in the number of people who are unable to keep up with their mortgage next year, with repossessions expected to rise to 53,000 in 2010, while it predicts 205,000 people will end the year in arrears.

CML director general Michael Coogan said: "Low interest rates, and lenders' forbearance policies, have helped to cushion many households facing financial problems.

"Although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties taken into possession unless interest rates rise."

The government said yesterday that about 300,000 people facing problems keeping up with their mortgage had benefited from its schemes, ranging from debt advice to help with mortgage interest payments.

But by the end of September, only 92 families had completed its Mortgage Rescue Scheme, which enables people to sell some or all of their home to a social landlord and rent it back.

However, the government defended the scheme, which has come in for criticism, saying 11,000 households had received free advice as part of it, while 690 had had the immediate threat of repossession lifted.

Housing charity Shelter welcomed the news on repossessions, but warned there was no room for complacency.

Kay Boycott, director of policy and campaigns at Shelter, said: "The CML's prediction shows growing unemployment will have a sustained impact on repossession levels next year.

"This, coupled with government support schemes potentially coming to an end in the next 12 to 18 months, means we are not out of the woods yet."