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Repossession estimates a ‘dream’

Repossession estimates a ‘dream’

Category: Mortgages

Updated: 17/08/2010
First Published: 17/08/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Revised repossession estimates as announced last week by the Council of Mortgage Lenders (CML) have been labelled a 'dream'.

The CML revealed that the number of properties repossessed continued to fall in the second quarter of the year, down from 9,800 in the first three months of 2010 to 9,400.

"Mortgage difficulties have so far been contained at lower levels than we expected at the start of the year, and by comparison to the 1990s recession," commented director general of the CML, Michael Coogan.

The welcome figures saw the organisation revise its forecast for arrears and repossessions for 2010 as a whole.

"The CML now expects 175,000 mortgages to end the year 2.5% or more in arrears, compared with the previous forecast of 205,000," it predicted.

"A total of 39,000 repossessions is now forecast for 2010 as a whole, compared with the previous forecast of 53,000."

However, the forecast has been called into question.

"I hope the CML's revised forecasts are correct, but there is strong evidence which suggests that their dreams may not come true," said Pete Thomson, managing director of Residential Property Solutions Ltd.

"Citizens Advice has reported that 25,360 people sought its advice between April and June this year regarding mortgage payment problems and has said that it believes the numbers can only escalate."

And, while low interest rates have helped many homeowners to keep up with the interest payments on their properties, a rise could have dire consequences for many.

"When interest rates do rise, as they will do eventually, thousands of borrowers are going to suffer payment shock," added Thomson.

"For some, it will be the straw that breaks the camel's back."

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