Posted on May 1st, 2011 | Categories - News
Following the growth estimate of 0.5% for the first quarter of the year, banks told consumers they were “not confident” they could lower repossessions and arrears to the same extent they could in 2010.
Figures from the Council of Mortgage Lenders show that last year the number of repossessions dropped to 36,300 from 47,700 in 2009. Experts say measures taken by the Government and banks to limit repossessions and only evict residents as a “last resort” helped to ensure repossession numbers could remain low.
Looking ahead the CML says that the weak economy, Government cuts and the rising costs of key essentials like food and fuel make it almost impossible to secure those levels in 2011.
“We are not confident that arrears and possessions will be countered so successfully in 2011,” said the body its 2010 Annual Report.
“The outlook for economic recovery remains weak, and planned cuts in government spending, tax increases, higher inflation and the prospect of rising interest rates are all likely to bear down on borrowers’ finances.”
In addition to raising repossession estimates, the CML also expects the number of people who fall behind with their mortgage repayments to rise from 169,000 to 180,000 in 2011.
In response to the figures, the Government has reminded home owners that they are entitled to the Mortgage Rescue Scheme. Under the scheme, home owners can choose to either sell their home and continue to live as tenants or get an equity loan to help them to reduce their mortgage.