Repossession looms large in CML forecast
The Council of Mortgage Lenders’ (CML) 2012 prediction forecasts that more borrowers will fall behind on their mortgages, leading to increased numbers of houses getting repossessed throughout the year.
Around 45,000 homes could be repossessed in 2012 CML has warned, a 20 per cent increase compared to the estimated 37,000 in 2011. Furthermore, the number of property sales and total mortgage lending is also supposed to decrease.
Over the past few years, there has been a consistent fall in the number of repossessions, something which, if CML’s predictions are right, looks set to change. However the organisation stressed that numbers would remain far lower than during the 1990s economic downturn.
The CML’s chief economist Bob Pannell said in his report: “Some of our earlier pessimism stemmed from the emphasis we gave to the likely cumulative pressure on household finances from the higher cost of living and modest growth in incomes. But this appears only now to be emerging as a drive of fresh arrears.
“We foresee a deterioration in the number of borrowers behind on their mortgages, and a more difficult and protracted period of adjustment for households seeking to reorder their finances.”