At the end of 2008, the CML predicted 75,000 properties would be repossessed this year but it has now changed its estimate in the light of changing lender attitudes. The CML says along with existing borrowers getting benefits from the effect of lower interest rates, there are also significant levels of forbearance being shown by lenders and the Government on repossession.
The CML still expects around 360,000 mortgages to be in arrears, equivalent to 2.5 per cent or more of the mortgage balance by the end of the year. Its forecasts for housing transactions and gross lending remain unchanged at 700,000 transactions and £145bn of gross lending.
But the net lending outlook now appears less negative with the CML now expecting net lending to fall by only around £5bn compared with the £25bn reduction previously anticipated.
The CML says: “The measures taken by the authorities have stabilised the economy and will sow the seeds for a recovery over time, including 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.”