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cML more optimistic on lending and repossessions
June 23, 2009
The Council of Mortgage Lenders (CML) has cut its forecast for repossessions this year and lifted its estimate for net mortgage lending in 2009.
A combination of low interest rates, ‘significant levels of forbearance' from lenders and government intervention to support homeowners have prompted the lenders organisation to cut its forecast for repossessions for this year from 75,000 to 65,000. In particular, large cuts in interest rates have made it easier for many households experiencing a reduction in their income to maintain their monthly payments. If the forecast turns out to be accurate, it means that 0.54 per cent of all mortgages will result in repossession this year.
At the same time, the CML expects mortgage lending to be more robust than originally expected. Total net lending (the amount lent, less repayments) is now expected to fall this year by around £5 billion, compared to a decline of £25 billion predicted earlier.
A spokesman for the CML commented: "The raft of measures taken by the authorities have stabilised the economy and will sow the seeds for a recovery over time, including in the housing market. But the improvement is likely to be slow and drawn out, especially as the extensive fiscal, monetary and credit support measures are gradually unwound."