This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8356258.stm
The article has changed 5 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| Lenders cut repossession forecast | Lenders cut repossession forecast |
| (20 minutes later) | |
| The number of homes likely to be repossessed this year will be only 48,000, the Council of Mortgage Lenders (CML) said. | The number of homes likely to be repossessed this year will be only 48,000, the Council of Mortgage Lenders (CML) said. |
| It is the second time this year it has cut its forecast. | It is the second time this year it has cut its forecast. |
| If its prediction is accurate, this will see repossessions rising by just 8,000 compared to 2008. | If its prediction is accurate, this will see repossessions rising by just 8,000 compared to 2008. |
| The CML's comments came as it revealed that repossessions in the July-to-September period rose by 3% to 11,700 - up 5% from the same period a year ago. | The CML's comments came as it revealed that repossessions in the July-to-September period rose by 3% to 11,700 - up 5% from the same period a year ago. |
| Last year, the CML thought that repossessions would rise steeply in the course of 2009 to about 75,000. | Last year, the CML thought that repossessions would rise steeply in the course of 2009 to about 75,000. |
| But it said they were being staved off by a combination of "lender forbearance", government measures and the beneficial effect of low interest rates. | But it said they were being staved off by a combination of "lender forbearance", government measures and the beneficial effect of low interest rates. |
| "We are glad to have been wrong on our previous forecast for mortgage repossessions this year," said the CML's director general, Michael Coogan. | "We are glad to have been wrong on our previous forecast for mortgage repossessions this year," said the CML's director general, Michael Coogan. |
| "Although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession, unless interest rates rise from the low levels that most commentators now expect to persist for some time," he added. | "Although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession, unless interest rates rise from the low levels that most commentators now expect to persist for some time," he added. |
| Arrears fall | Arrears fall |
| The CML also reported that both the number and proportion of mortgages in arrears fell in the third quarter, despite the economy moving deeper into recession and unemployment rising. | The CML also reported that both the number and proportion of mortgages in arrears fell in the third quarter, despite the economy moving deeper into recession and unemployment rising. |
| It is also a result of the low cost of borrowing which is easing the pressure on household finances and is in marked contrast to the experience of the early 1990s Simon Rubinsohn, Rics | |
| At the end of September, there were 194,600 mortgages - 1.77% of the total - which had accumulated arrears of 2.5% or more of the outstanding loan. | At the end of September, there were 194,600 mortgages - 1.77% of the total - which had accumulated arrears of 2.5% or more of the outstanding loan. |
| The number in arrears was 9,600, or 5%, fewer than the 204,200 mortgages in that position at the end of June, which were 1.86% of the total number of mortgages at that time. | The number in arrears was 9,600, or 5%, fewer than the 204,200 mortgages in that position at the end of June, which were 1.86% of the total number of mortgages at that time. |
| Even so, the September figure was still 29% higher than at the same stage last year. | Even so, the September figure was still 29% higher than at the same stage last year. |
| But the CML said the outlook for the UK property market this year and next was much better than before. | |
| In its official forecast, it said sales would rise this year to 810,000 and to 850,000 in 2010. | |
| And if interest rates stay low, the number of mortgages with arrears of 2.5% or more of the outstanding loan will be just 195,000 at the end of the year, rising slightly next year to 205,000. | |
| Originally the CML thought that 360,000 mortgages would be in arrears by the end of this year. | |
| Pipeline | |
| The number of potential repossessions in the pipeline in England and Wales is also falling, according to separate figures from the Ministry of Justice (MoJ). | The number of potential repossessions in the pipeline in England and Wales is also falling, according to separate figures from the Ministry of Justice (MoJ). |
| It said that the number of possession actions launched in the courts in the third quarter was 24,337. This was 7% fewer than in the previous three months and 37% lower than at the same time last year. | It said that the number of possession actions launched in the courts in the third quarter was 24,337. This was 7% fewer than in the previous three months and 37% lower than at the same time last year. |
| The number of possession orders actually agreed by judges fell similarly to 17,134 - 9% fewer than in the second quarter of this year and 35% down on the same period of 2008. | |
| The MoJ pointed out that the fall in both actions and orders had been influenced by the introduction in November 2008 of a new set of rules. | |
| These lay down the steps that lenders should take before starting a repossession action, including talking to borrowers about their financial problems and considering any offer from them to reschedule their payments. | |
| "It is also a result of the low cost of borrowing which is easing the pressure on household finances and is in marked contrast to the experience of the early 1990s," said Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics). |