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| Repossession risk 'overestimated' | Repossession risk 'overestimated' |
| (30 minutes later) | |
| The Council of Mortgage Lenders has cut its forecast for the number of homes expected to be repossessed in 2009. | The Council of Mortgage Lenders has cut its forecast for the number of homes expected to be repossessed in 2009. |
| The lenders' group predicted that 65,000 homes would be repossessed this year, 10,000 fewer than the estimate it made in December. | The lenders' group predicted that 65,000 homes would be repossessed this year, 10,000 fewer than the estimate it made in December. |
| The figure would still mark a sharp rise from the 40,000 homes repossessed in 2008. | The figure would still mark a sharp rise from the 40,000 homes repossessed in 2008. |
| The change comes as a scheme offering last-gasp free advice in courts about repossessions in England was extended. | |
| Market still 'subdued' | |
| While changing its prediction, the CML said it was still too early to suggest that a "robust recovery" in the housing market had started. | While changing its prediction, the CML said it was still too early to suggest that a "robust recovery" in the housing market had started. |
| It has still not offered any predictions for house prices for the year but, with lending still tight, it said housing activity would "remain subdued" for some time yet. | |
| Its latest figures revealed an annual rise in UK repossessions of 50% in the first three months of the year. | |
| More figures on the number of people losing their homes are to be published by the Financial Services Authority later. | More figures on the number of people losing their homes are to be published by the Financial Services Authority later. |
| Interest rates | |
| With a growing number of people losing their jobs, the CML predicted that the number of people getting into significant arrears on their mortgage repayments would almost double compared with last year. | |
| We expect that further job losses and disruption to incomes will cause the number falling behind with their mortgage payments to rise Council of Mortgage Lenders Advice about home loss threats Slow start for mortgage help plan | |
| It said 360,000 mortgages would be in arrears of more than 2.5% of their outstanding balance by the end of the year, up from 182,600 at the end of 2008, although this forecast has been cut by 15%. | |
| The key factor in the CML lowering its forecasts was continued low interest rates. With the Bank rate having dropped from 5% at the start of October to 0.5% now, many homeowners' mortgage bills have become cheaper. | |
| Those who have lost jobs or bonuses could still be struggling to pay, but - unlike the early 1990s - those arrears have been building up relatively slowly. | |
| This has offered some breathing space for homeowners and their lenders to come to agreements if the loss of income is only temporary. | |
| "Nevertheless, we expect that further job losses and disruption to incomes will cause the number falling behind with their mortgage payments to rise over the course of 2009 - but at a slower pace than we had previously anticipated," the group said. | |
| The CML estimates that 425,000 borrowers will be more than three months in arrears on their home loans by the end of 2009. | |
| Extended scheme | Extended scheme |
| To assist those at risk, the government said a scheme offering free advice in court for people attending repossession hearings is being extended to all parts of England. | To assist those at risk, the government said a scheme offering free advice in court for people attending repossession hearings is being extended to all parts of England. |
| It is doubling funding for the programme - which also provides guidance for tenants being evicted - to £1.5m. | It is doubling funding for the programme - which also provides guidance for tenants being evicted - to £1.5m. |
| The extra money mean advisers will be placed in every court in England. | The extra money mean advisers will be placed in every court in England. |
| The system is primarily aimed at people who are often unaware of the extent of their housing difficulties or who believe nothing can be done to keep them in their homes. | The system is primarily aimed at people who are often unaware of the extent of their housing difficulties or who believe nothing can be done to keep them in their homes. |
| "It is real backstop help for those closest to the point of losing their home," said Housing Minister John Healey. | "It is real backstop help for those closest to the point of losing their home," said Housing Minister John Healey. |
| "All is not lost, even in court. In four out of five cases, the court desk advisers stop immediate repossession or eviction." | "All is not lost, even in court. In four out of five cases, the court desk advisers stop immediate repossession or eviction." |
| Multiple schemes | Multiple schemes |
| The scheme is one of a number in place aimed at helping those at risk of losing their homes through repossession. | The scheme is one of a number in place aimed at helping those at risk of losing their homes through repossession. |
| They include a plan to allow people to defer mortgage interest payments after a sudden drop in income, and a court protocol to ensure repossession is the last resort. | They include a plan to allow people to defer mortgage interest payments after a sudden drop in income, and a court protocol to ensure repossession is the last resort. |
| Only two households in England have so far been given help in the first four months of a £285m mortgage rescue scheme, in which not-for-profit housing associations buy homes from people struggling to pay their mortgage and then allows them to continue living there by paying "affordable rent". | Only two households in England have so far been given help in the first four months of a £285m mortgage rescue scheme, in which not-for-profit housing associations buy homes from people struggling to pay their mortgage and then allows them to continue living there by paying "affordable rent". |
| Without offering an endorsement of the direct effect of government schemes, the CML said that the schemes meant that more people were getting in touch with their lenders and getting help as a result. |