The Council of Mortgage Lenders is predicting “a bulge” in repossessions lasting for the next few years rather than a one-off spike.
It expects repossessions to rise from 46,000 to 53,000 this year.
The CML says patterns in the early 1990s suggest the market will endure a slow recovery. Repossession figures for 2009 were up by 15 per cent on 2008 but lower than the 75,000 the CML forecast at the start of the year.
It says low interest rates, lenders’ attitude and Government assistance helped check the number of repossessions and mortgage arrears in 2009.
The CML says: “What we may see is something of a bulge in possessions, extending over a number of years, rather than a spike with totals rising sharply and falling rapidly. Our prediction is that both arrears and possessions are likely to continue to rise modestly this year – from 88,000 to 205,000, and from 46,000 to 53,000, respectively.”
John Charcol senior technical manager Ray Boulger says: “I think the CML is right. We are not past the worst for repossessions.”