Debt Settlement Solution:Risk of repossession “overestimated”
Monday, 20. July 2009
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The forecast of the number of homes expected to be repossessed this year has been altered by the Council of Mortgage Lenders.
The lenders’ group amended it prediction from December 2008. According to the CML, 65,000 homes will be repossessed in 2009, 10,000 fewer than the original estimate.
That figure, however, is still a marked rise from the 40,000 homes that were repossessed in 2008.
As job losses increase and the recession tightens, debt problems are becoming more prevalent for many people. In England a scheme offering free advice about repossessions in courts has just been extended.
If debt problems are getting on top of you then seeking debt advice is advisable, before the problem reaches the level of bankruptcy or home repossession.
The CML has said it is still too early to suggest that the housing market is beginning a “robust recovery”.
Low interest rates were the main factor in the amended predictions by the CML. With the Bank of England having dropped rates from five per cent in October 2008 to 0.5 per cent today, many homeowners’ mortgage payments have become cheaper.
No predictions have been forthcoming from the CML for house prices this year, but, with the lending market still acting conservatively, it said housing activity would likely “remain subdued” for some time.
Unemployment is still rising according to official figures. In light of this, the CML has predicted that the number of people experiencing significant mortgage arrears will be almost double last year’s numbers.
182,600 people were in mortgage arrears of more than 2.5 per cent of their outstanding balance at the end of 2008. The CML has predicted that 360,000 mortgages would be in arrears by the end of 2009, although this forecast is also lower than the group’s original estimate.