75,000 set to lose their homes

Around 75,000 people will have their homes repossessed during 2009 and the number of people unable to keep up with their mortgage repayments will more than double, the Council of Mortgage Lenders predicted today.

The group expects a 67 per cent surge in the number of people who lose their home during the year, up from an estimated 45,000 for this year.

It also expects around 500,000 people to fall at least three months behind with their mortgage repayments, compared with 210,000 in 2008.









The Council of Mortgage Lenders (CML) warned that despite the work the Government and industry were doing, 2009 was going to be a "very tough year" for the UK mortgage market.



It expects net lending to turn negative for the first year since records began in 1964, meaning that consumers will repay more on their mortgages than they borrow.



Net lending, which strips out repayments and remortgaging, is expected to dive to minus £25bn, as new lending fails to keep up with repayments.



The figure is well down on net lending of £40bn for 2008 and £108bn in 2007, a level that the Government has urged the industry to replicate next year.



Total advances are also expected to be considerably lower at £145bn in 2009, down from around £258bn this year and less than half the £363bn advanced in 2007.



The group said a significant number of the properties that were repossessed were likely to be cases where the home had been abandoned by its owners or the property had been used in a fraud.



A sizeable proportion of the cases are also expected to be buy-to-let properties.



But it added that even though lenders had committed to working with homeowners to help them avoid losing their homes, the worsening economic backdrop pointed to an "inevitable increase" in the number of cases where a sustainable alternative solution could not be found.



The prediction of 75,000 repossessions, which will represent 0.66 per cent of all mortgages, is the same as the one given to ministers earlier this month before the Government announced its new Homeowner Mortgage Support Scheme, under which people can defer paying interest on their mortgage for up to two years.



The CML said schemes such as this one, as well as the greater forbearance being shown by lenders, would contribute to the steep jump in the number of people in mortgage arrears.



It expects the proportion of people who are in arrears of at least three months to soar to 4.41 per cent of all mortgages from an estimated 1.8 per cent this year.



The forecast came as the CML reported that total mortgage advances during November had sunk to just £14.6bn, the lowest level since February 2002.



The figure was 22 per cent lower than in October and 51 per cent below the level for November last year.



The group said that while there was typically a decline in lending levels between October and November, the fall was "considerably larger" than usual, which it said reflected the current market disruption and the continued deterioration of confidence in the economy.









Unsurprisingly, given the problems in the mortgage market, the CML expects activity in the housing market to remain "extremely subdued" next year, with only around 700,000 homes changing hands, down from 900,000 this year and 1.6 million in 2007.



CML director general Michael Coogan said: "In looking ahead to the coming year, the housing market will remain extremely subdued and net mortgage lending is likely to turn negative.



"Repayment problems will worsen against the backdrop of rising unemployment but lenders and Government are working to try to reduce the negative impact on borrowers.



"Recent glimmers of light in terms of Government intervention to improve conditions to support new lending are helpful, but more will be needed."



The group stressed that forecasting in the current climate was extremely challenging, and it has abandoned its usual house price prediction for next year.



It added that the predictions it had made represented a "best estimate of direction of travel", rather than a precise analysis.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
News
news
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
New Articles
i100... with this review
PROMOTED VIDEO
Voices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
Sport
footballTim Sherwood: This might be th match to wake up Manchester City
Arts and Entertainment
musicHow female vocalists are now writing their own hits
New Articles
i100
News
news
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
News
Blahnik says: 'I think I understand the English more than they do themselves'
people
Arts and Entertainment
Michelle Dockery as Lady Mary Crawley in Downton Abbey
TVInside Downton Abbey series 5
Life and Style
The term 'normcore' was given the oxygen of publicity by New York magazine during the autumn/winter shows in Paris in February
fashionWhen is a trend a non-trend? When it's Normcore, since you ask
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam