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

Press release

Nationwide Building Society is, from Friday 16 October 2009, launching a number of initiatives, and rate cuts of up to 0.84%, which could make it easier for homebuyers to access mortgages and remortgages. The Society is also making further improvements to its outstanding range of options available to existing customers coming to the end of their deal.

Real help for first time buyers
Nationwide is offering first time buyers two new options designed to make it easier and cheaper for them to borrow by reducing the amount they pay upfront to secure a deal. First time buyers can choose between:

• a bigger discount on the reservation fee, changing from £250 to £500, or;
• a £250 reservation fee discount plus free legal fees.*