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CML ready to reduce repo forecast for year

The Council of Mortgage Lenders says it will review its prediction of 75,000 repossessions for this year as it now believes this may be too pessimistic.

It reported 12,800 repossessions by first-charge lenders in the first quarter of 2009 compared with 10,400 in Q4 2008 and now thinks its original 75,000 forecast for the full year will be revised in its next update. Director general Michael Coogan says: “It is clear that mortgage arrears and repossessions did increase but not as much as our 75,000 forecast figure for the year would suggest so our forecast now looks pessimistic and we expect to revise it over the next month or so.”

Xit2 sales director of property Mark Blackwell says: “Our experience suggests the CML statistics did not reflect the lengths that lenders are now going to explore workable options for addressing borrowers’ problems. In February, we forecast 65,000 possessions at most. I hope we are proved right.”

Asset Management Group managing director Simon Matthews believes total annual repossessions will be lower still, highlighting signs of underlying strength in the housing market. He says: “The real repossession figure based on current activity levels is unlikely to top 60,000.”

But Property Portfolio Rescue director Nick Hopkinson believes the CML’s forecast may be right. He says: “Repossessions are up 50 per cent since the first quarter last year but more worrying is the 62 per cent leap in homeowners who are in serious arrears. I fear the CML’s projection of 75,000 repossessions is still pretty accurate.”

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