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/7789274.stm
The article has changed 6 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Mortgage arrears 'to hit 500,000' | |
| (21 minutes later) | |
| Mortgage lenders predict the recession will lead to a huge rise in arrears among their borrowers in 2009. | Mortgage lenders predict the recession will lead to a huge rise in arrears among their borrowers in 2009. |
| The Council of Mortgage Lenders (CML) said the number of households more than three months behind with their repayments would reach 500,000. | The Council of Mortgage Lenders (CML) said the number of households more than three months behind with their repayments would reach 500,000. |
| That will be more than double this year's expected figure of 210,000. | That will be more than double this year's expected figure of 210,000. |
| The CML said 2009 would be "very tough" because the recession would drive up unemployment and lead to 75,000 repossessions among borrowers. | The CML said 2009 would be "very tough" because the recession would drive up unemployment and lead to 75,000 repossessions among borrowers. |
| "The economic recession means unemployment is rising sharply, and this will inevitably impact on the number of households facing mortgage arrears," it said. | "The economic recession means unemployment is rising sharply, and this will inevitably impact on the number of households facing mortgage arrears," it said. |
| Forecast 'futile' | Forecast 'futile' |
| The international credit crunch of the past 18 months, which has seen some of the UK's biggest lenders collapse or be taken over, has led to an unprecedented drought of funds for home buyers. | The international credit crunch of the past 18 months, which has seen some of the UK's biggest lenders collapse or be taken over, has led to an unprecedented drought of funds for home buyers. |
| The housing market will remain extremely subdued and net mortgage lending is likely to turn negative Michael Coogan, CML | |
| The CML's latest figures show that gross mortgage lending in November fell by another 22% from October, to just under £15bn - which was 51% lower than in the same month last year. | The CML's latest figures show that gross mortgage lending in November fell by another 22% from October, to just under £15bn - which was 51% lower than in the same month last year. |
| With house prices still falling rapidly the CML has declined to make a formal house price forecast for 2009, describing the idea recently as "futile". | With house prices still falling rapidly the CML has declined to make a formal house price forecast for 2009, describing the idea recently as "futile". |
| But it predicts that sales next year will continue falling to just 700,000; from 900,000 this year and 1.6 million in 2007. | But it predicts that sales next year will continue falling to just 700,000; from 900,000 this year and 1.6 million in 2007. |
| The housing market would remain "extremely subdued" said the CML's director general Michael Coogan, who predicited that new mortgage lending would be so low that it would be outstripped by people paying off their mortgages. | |
| "Recent glimmers of light in terms of government intervention to improve conditions to support new lending are helpful, but more will be needed," he added. | |
| Seismic shifts | |
| The CML pointed out that existing borrowers on variable rates would see their repayments cut because of the recent reductions in interest rates. | |
| But it said the housing market was bearing the brunt of the credit crunch and despite what it called "seismic shifts" in government economic policy to deal with the situation, the market would not start to recover until the second half of 2009 at the earliest. | |
| One reason for the expected sharp rise in arrears is that lenders will hold off from repossessing some borrowers who are struggling, under pressure from the government and with help from the various recently launched mortgage assistance schemes. | |
| And the CML claims that not all the eventual repossessions will involve homeowners being evicted from their properties. | |
| "A significant number of these are likely to be cases where the property is abandoned or where property fraud has been perpetrated, and a sizeable share are expected to be buy-to-let mortgages," it said. |