Repossession forecast cut by lenders

The Council of Mortgage Lenders have revised its figure from 75,000 to 65,000 in response to lower mortgage rates that make it easier for homeowners to meet repayments.

It still expects a significant rise on the 2008 total of 40,000 because of rising unemployment.

It said measures taken to support the economy have stabilised the housing market, but that ‘the improvement is likely to be slow and drawn out, especially as the extensive fiscal, monetary and credit support measures are gradually unwound’.

Housing charity Shelter warned against complacency, and said the government and lenders are not planning for the future.

Chief executive Sam Younger said: ‘With arrears escalating at an alarming rate, unemployment at its worst for 12 years and interest rates very likely to rise next year, we believe a second, more devastating wave of repossessions could occur within the next two years.’

Liberal Democrat housing spokeswoman Sarah Teather echoed Shelter’s view.

‘With 65,000 families still facing the misery of repossession and homelessness this year, this is no time for complacency,’ she said.

‘Far too many people are still falling between the gaps of the government’s existing schemes.’

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