CML forecasts growing numbers of house repossessions in 2012
Filed under: News —
The Council of Mortgage Lenders (CML) latest estimations concerning the number of house repossessions for 2012 don’t make for particularly comfortable reading.
In 2011, repossessions are likely to hit 37,000, but that figure will rise by 22% to some 45,000 next year according to the CML’s predictions.
That upward movement in repossession activity will be driven by growing unemployment levels and falling household income.
It’s no real surprise that the CML has also dropped its forecast for property sales and total mortgage lending in 2012.
Mortgage lending was expected to increase from £138 billion in 2011 to £150 billion next year, but that prediction has now been dropped to £133 billion for 2012.
Home sales levels are also set to decrease from 850,000 to 825,000 next year according to the Council’s best guess.
The housing market outlook continues to be dour, with mortgages still a huge obstacle to first-time buyers despite interest rates being held at 0.5%.
The much larger deposits now required continue to be a thorn in FTB’s sides, and next year could see that becoming an even bigger issue in spite of the efforts of the government and its planned mortgage indemnity scheme.
Bob Lender of Financial Advisor said, “The marketplace has a reasonably healthy offering of mortgage products, but demand for them is limited. Independent mortgage advisers are seeing a real and continued downturn in the property market.”
Current repossession levels are artificially depressed with interest rates being held so low for so long. The last major housing market crash at the close of the eighties saw considerably more repos, and the current economic storm is a far stronger force.
Unfortunately the real problems are likely to begin when the government has no choice but to hike interest rates, and those on trackers or unable to refinance find themselves in serious fiscal bother.
The latest repossession numbers from the Financial Services Authority (FSA) show that the second quarter of 2011 saw 9,134 instances of repossession, which rose almost 6% in Q3 to 9,670.
Source: Finance Markets
Story link: CML forecasts growing numbers of house repossessions in 2012
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