The Council of Mortgage Lenders has warned that the economic downturn will trigger a massive hike in repossessions next year.
In a forecast on housing market conditions for 2009, the council, which represents lenders, predicted that 75,000 homes would be repossessed next year, up from an estimated 45,000 this year. The 2008 figure is itself a massive increase on the 26,200 possessions in 2007.
The council also predicted that the number of households over three months in arrears on their mortgage payments would increase from an estimated 210,000 at the end of this year to 500,000 at the end of 2009.
Worsening economic backdrop
The council said: “The worsening economic backdrop will inevitably lead to a rise in the number of borrowers losing their jobs and facing disruption to their income.”
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.”
However, it said that a “significant” number of repossessions are likely to involve abandoned property or property fraud, while a “sizeable” number would concern buy-to-let properties.