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Mortgage lenders: ‘Fewer repossessions than expected in 2009’

Wednesday, 24 June Writes Hazel Cottrell hazel.cottrell@consumerchoices.co.uk

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Fewer homes will be repossessed this year than previously expected, according to the Council of Mortgage Lenders.

The Council of Mortgage Lenders (CML) (www.cml.org.uk) has revised its mortgage forecast for 2009, and has cut the number of repossessions it expects from 75,000 to 65,000.

“Identifying the problem early is the best way forward”

It also reduced the number of borrowers it expects to be in more than three months arrears at the end of the year, from 500,000 to 425,000.

The CML said that large cuts in mortgage interest rates are “making it easier for households who suffer a loss of income to continue to pay their bills.”

In addition, it said the range of government and industry initiatives that have been introduced, including mortgage rescue and the homeowner mortgage support scheme, mean that “more people are making contact with their lender and in most cases get help.”

The CML also improved its forecast for how much it expects banks to lend this year. It now expects bank lending for mortgages to contract by £5billion this year, rather than the £25billion it previously anticipated.

However, it said that despite “recent encouraging signs”, it is too early to believe that the housing market is at “the start of a robust recovery”. It said that while the seeds are being sown for recovery, “the improvement is likely to be slow and drawn out.”

Chris Eagle, commercial manager at CreditChoices.co.uk, advises those struggling with mortgage repayments to contact their lender as soon as possible.

He said: “Lenders have procedures for tackling payment difficulties and the sooner you let them know you are having problems, the sooner they can help. Identifying the problem early, rather than trying to brush it under the carpet, is the best way forward.”