Mortgage guru Ray Boulger believes repossessions could reach as high as 60,000 next year, a third more than the Council of Mortgage Lenders’ estimate.
Boulger, senior technical manager at John Charcol, says he fears the CML’s forecast of 45,000 repossessions in 2008 is too optimistic and the longer the credit crunch goes on, the worse the situation will be.
He says: “Nationwide’s Matthew Wyles recently said that the sub-prime securitisation market may not fully recover for at least another two years. I would not necessarily argue with that sentiment. History shows us that when there is a financial problem as we have got, it usually takes a lot longer to recover and it is usually a lot worse that we expect.”
Black and White Group chief executive Thomas Reeh also warns that lenders will get a shock if they think it will be easy to get a repossession order.
He says: “It is a very costly thing to do so I think a lot more lenders will be forced to negotiate a deal rather than go through with a repossession. Courts are usually in favour of consumers and getting a repossession order will be very hard, particularly if courts start to get very busy with them.”
Wave director of distribution and sales Merhdad Yousefi says he believes repossessions will reach between 38,000-43,000 by the end of 2008, which puts him broadly in line with the CML’s forecast. He says: “We have to put this into perspective. In the last recession, we had repossession figures at 75,000 so we are not at all near that.”
Nationwide non-retail executive director Matthew Wyles adds: “Refinancing in the sub-prime market was masking a lot of arrears and repossessions. As lending criteria has tightened dramatically, it is bound to have an effect on the sub-prime arena.”