Half a million face mortgage arrears

Banks urged to show more patience towards struggling homeowners

Bank and building society executives should be forced to report monthly on how they treat homeowners who fall behind on mortgages, a campaigner urged yesterday.

The call came amid predictions that repossessions next year will rise to the record levels of the early 1990s.

Mick McAteer, director of the Financial Inclusion Centre, said ratcheting up pressure on the banks – whose "reckless lending" had caused the current financial woes – would prevent even more people losing their home as job losses mounted.

He demanded that lenders be forced to report to the Chancellor monthly after the Council of Mortgage Lenders (CML) forecast that 500,000 homeowners would fall behind on their mortgage repayments by more than three months in 2009, more than double the 210,000 expected this year. The lenders' representative forecast repossessions would reach 75,000 – up 67 per cent on this year and the highest since the previous record was set in 1991, following the 1980s housing crash, when there were 75,500.

Both predictions were made despite the Bank of England base rate falling to 2 per cent, promises from mortgage lenders to delay court proceedings for repossessions and the Government's scheme to aid borrowers.

Announcing its 2009 forecasts, the Council of Mortgage Lenders, was unequivocally gloomy forecasting a fall in overall lending next year. It said: "However hard the government and the lending industry work towards improving conditions, 2009 is going to be a very tough year in the UK mortgage market.

The CML estimated that "a significant number" of repossessions would be cases where the property had been abandoned or there had been fraud, while a "sizeable share" would be wealthier buy-to-let borrowers.

However, it added: "Even though lenders will seek to minimise repossessions in 2009, the worsening economic backdrop does point towards an inevitable increase in the number of cases where a sustainable alternative solution cannot be found. "

A surge in unemployment – rising at its fastest level in decades with 75,700 more claiming Jobseekers Allowance last month – will force many homeowners to renege on mortgage payments.

Many borrowers also have other extensive credit card debt and loans accrued during the years of economic growth before the credit crunch bit.

Mr McAteer said: "The latest estimates from the CML are alarming and confirm our worst fears. Unless the Government and FSA force lenders to treat borrowers fairly, repossessions will rise to levels not seen since the early 1990s. "Lenders should be required to report on a monthly basis how many borrowers they have in arrears, how many they are repossessing, and justify their behaviour."

He added that the CML estimates did not include repossessions by sub-prime lenders who were not CML members and were not subject to the same constraints.

Adam Sampson, chief executive of housing charity Shelter, also called on banks, building societies and ministers to act more decisively to allow people to keep their homes.

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Office Manager / Financial Services

    £30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

    Jemma Gent: Year End Accountant

    £250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

    Jemma Gent: Management Accountant

    £230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

    Beverley James: Accounts Payable

    £22,000 - £23,000: Beverley James: Are you looking for the opportunity to work...

    Day In a Page

    HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

    Scientists hail daily pill that protects against HIV infection

    Breakthrough in battle against global scourge – but will the NHS pay for it?
    How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

    Time to play God

    Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
    MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

    MacGyver returns, but with a difference

    Handyman hero of classic 1980s TV series to be recast as a woman
    Tunnel renaissance: Why cities are hiding roads down in the ground

    Tunnel renaissance

    Why cities are hiding roads underground
    'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

    Boys to men

    The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
    Crufts 2015: Should foreign dogs be allowed to compete?

    Crufts 2015

    Should foreign dogs be allowed to compete?
    10 best projectors

    How to make your home cinema more cinematic: 10 best projectors

    Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
    Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

    Manchester City vs Barcelona player ratings

    Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
    Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

    Monaco: the making of Wenger

    Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
    Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

    Chris Gayle: The West Indies' enigma

    Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
    In Ukraine a dark world of hybrid warfare and murky loyalties prevails

    In Ukraine a dark world of hybrid warfare

    This war in the shadows has been going on since the fall of Mr Yanukovych
    'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

    Homage or plagiarism?

    'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
    Broadchurch ends as damp squib not even David Tennant can revive

    A damp squib not even David Tennant can revive

    Broadchurch, Series 2 finale, review
    A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

    Inside the mansion of Germany's 'Bishop of Bling'

    A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower