June 13, 2011
The Council of Mortgage Lenders has predicted that home repossessions will rise from 40,000 this year to 45,000 in 2012.
The gloomy outlook comes as news that lender enforced mortgage rationing, which has put downward pressure on UK property sales, will stay in force until at least the end of next year.
Lenders remain cautious about the size of loans they are willing to offer to home buyers, due to the foreseeable struggles with job security, rising interest costs and "a weak and patchy recovery", the CML said.
"The aftermath of the global financial crisis continues to have a pronounced impact on mortgage and housing markets," the CML said. "Property transactions look set to remain at the low levels of the past few years.
"Lenders will continue to have only a modest risk appetite, and this will limit lending at high loan-to-value ratios," the CML added.
Forecasts predict that borrowers classified as in arrears will rise to 180,000 this year and stay there in 2012, while the number of homes repossessed will rise from 36,000 in 2010 to 40,000 this year, but will rise further next year to 45,000.
