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CML revises housing market forecasts

CML revises housing market forecasts

Category: Mortgages

Updated: 22/06/2009
First Published: 22/06/2009

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The Council of Mortgage Lenders (CML) has cut the number of homes it expects to be repossessed in the UK this year, although it warned that activity is likely to remain subdued for some time yet.

The body said it now expected 65,000 homes to be repossessed this year, a decrease of 10,000 compared to the estimate made in December. Lower interest rates combined with government and industry initiatives were cited as the main reasons for the positive revision.

"The raft of measures taken by the authorities have stabilised the economy and will sow the seeds for recovery over time, including the housing market," the CML said.

"But improvement is likely to be slow and drawn out, especially as the fiscal, monetary and credit support measures are gradually unwound."

The number of mortgages anticipated to be in arrears by the end of the year was cut to 360,000, a drop of about 15 per cent, while the forecast for net lending was also altered. The CML expects it to fall by £5 billion, not the £25 billion it had previously predicted.

Forecasts for housing transactions and gross lending remained unchanged, with 700,000 transactions and £145 billion worth of lending expected. The CML also said it expected remortgaging to remain subdued.

"Despite some recent encouraging signs, we believe it is too early to be sure that the slightly more positive news from the housing market indicates the start of a robust recovery," the group said.

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