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repossesion forecasts lowered but still significant share of transactions
Fewer homeowners are expected to face repossession this year than had been feared because there is less pressure on people struggling with mortgage repayments, according to a forecast from the Council of Mortgage Lenders (CML). The CML has revised down its original expectation that 75,000 houses would be repossessed in 2009 to 65,000 to take into account lower interest rates, government intervention and lenders’ forbearance.
We estimate that about 10% of home sales this year will be repossessions – this is a significant amount of forced sales in market share terms and a major reason for the rapid fall in home prices.
The industry body also reduced its estimate for the number of homeowners who would be in arrears of three months or more by the end of the year from 500,000 to 425,000. It added that unemployment would mean that the number of borrowers struggling to meet repayments would continue to increase from last year’s levels, albeit at a slower pace.
Other housing data released on Monday 22nd June gave a mixed view of the market’s fortunes. Figures from the Financial Services Authority (FSA) showed a 62 per cent increase in repossessions, from 9,174 in the first quarter of 2008 to 14,825 in same period this year, and a 33 per cent rise in arrears, from 299,588 to 398,991.We will issue a detailed local analysis of Bournemouth, Christchurch and Poole property prices in the July issue of our PROPERTYtimes.© YOUhome® Published 23/06/2009