The full extent of the remarkable transformation in the housing market since the gloom of a year ago is revealed in new figures from the Council of Mortgage Lenders (CML) today.
In December 2008 the CML was forecasting levels of arrears and repossessions in 2009 as great as in the crash of the early 1990s. Up to 75,000 families would lose their homes, it said, and 500,000 would be more than three months behind with their mortgages.
It had already revised those forecasts in June as it became clear that record low interest rates and a range of government initiatives would mean things would not be remotely as bad. Today it revised them down again to 48,000 repossessions and 195,000 mortgages more than 2.5% in arrears (a measure it now sees as more accurate) in 2009.
The trend is clear from the third quarter figures also published today. Repossessions between July and September totalled 11,700 - 300 more than in the second quarter and 600 more than a year ago. Arrears were also down on the second quarter in all but the worst cases - families with arrears of more than 10% of their mortgage.
The contrast with 1991 and 1992 could hardly be greater - as I’m sure Labour ministers will waste no time reminding us - and the transformation does not stop there.
The buy-to-let market had looked vulnerable to meltdown in the early part of 2009, with big rises in arrears, repossessions and properties with a receiver of rent appointed and falls in lending.
The third quarter figures for buy to let show that arrears and receivership cases fell, although there were 14% more repossessions, and that gross advances rose for the first time since the start of the credit crunch.
All in all it’s quite a recovery - except for the fact that it won’t feel like one. With unemployment rising and lending capacity still weak, the CML expects the market to stay subdued. Transactions will barely rise at all in 2010, it forecasts, and stay at around half the level seen in 2007. Gross advances will rise slightly but be less than half 2007 levels.
Meanwhile repossessions will rise 10% to 53,000 next year. That sounds like good news compared to all the gloom until you remember that it’s double the level seen in 2007.
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