500,000 to face mortgage arrears in 2009, says CML

24 December 2008

The UK mortgage market faces a "very tough year" in 2009 with the number of households whose mortgages are more than three months in arrears set to hit 500,000 by next December, the Council of Mortgage Lenders (CML) has said.

In its forecast for the next 12 months, the industry group said the main driver of the rise in mortgage arrears will be the worsening economy, which will cause higher unemployment and cut off incomes.

The organisation added that the government`s call for mortgage lenders to show greater leniency in order to reduce repossession orders and initiatives such as the Homeowner Mortgage Support Scheme will mean more borrowers stay in arrears next year.

By the end of next year, the CML forecast that 75,000 repossessions will have taken place, although it noted that a "significant number" of these will be cases where a property has been abandoned or where mortgage fraud has been detected.

The CML is a trade association whose members account for around 98 per cent of residential mortgage lending in the UK.

Tags: mortgage arrears

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