David Prosser: Repossessions relief at CML is widely shared

Outlook: Just two households have so far had help from the £285m mortgage rescue scheme
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The Independent Online

Yesterday's public U-turn on mortgage repossession projections by the Council of Mortgage Lenders' has several positive implications (leaving aside the obviously happy news that fewer people than previously thought will lose their homes this year).

The first is that if lenders are now expecting to see a less serious rise in bad debt than they had been planning for a few months ago, there may be some scope for them to be less risk-averse in their policy on advances. That would have a positive impact on the housing market, where first-time buyers, in particular, are finding it no easier to access mortgage finance than at the height of the financial crisis last autumn.

It will also be good news if fewer people than expected see their credit status downgraded because they are behind with mortgage repayments. The current projection is that one in seven Britons will, by the end of next year, be classed as a sub-prime borrower and thus face uncompetitive rates for any type of credit.

Those affected would then find it even harder to find new mortgage finance, as well as facing higher costs for unsecured borrowing, which would have a knock-on effect on the High Street. Those of us who have an instinctive dislike of the rip-off rates charged in some parts of the sub-prime market should also be pleased if it does not expand at the rate some lenders hope for.

Finally, one conclusion that people definitely shouldn't jump to on the basis of the CML's revised projections is that a government scheme to help people escape repossession is paying dividends. Just two households have so far had help from the £285m mortgage rescue scheme that ministers unveiled with great fanfare earlier this year.