Council of Mortgage Lenders cuts 2009 repossession forecast

The Council of Mortgage Lenders has cut its forecast for the number of repossessions this year to 48,000.

Having anticipated 75,000 repossessions in 2009 in last year's housing market forecasts, the forecast had already been revised down to 65,000 in June, but is now being cut again in recognition of lender forbearance, government measures and the beneficial effect of continuing low interest rates which are helping most borrowers facing difficulty to keep their homes.

Meanwhile 11,700 properties were taken into possession in the third quarter, up slightly from 11,400 in the previous quarter, and 5% higher than the number in the third quarter of 2008, but still lower than the 12,700 in the first quarter of the year. Around a quarter of the possessions in the third quarter of the year took place without a court order, very similar to the proportion in the previous quarter of the year.

In terms of new lending next year, the CML expects a modest increase. But it is difficult to see the case for a dramatic upturn in the absence of significant improvement in the wider economic picture. There is a risk that public spending cuts and higher taxes could choke off recovery. So, although we have become more optimistic, we remain cautious about market prospects."