David Prosser: Not out of the woods on repossessions yet
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Your support makes all the difference.Outlook Naturally, we should be pleased that the latest figures from the Council of Mortgage Lenders show another decline in the number of people having their homes repossessed. Fewer people are falling into arrears on their mortgage repayments too – so much so that the CML has felt able to cut its forecast for total repossessions this year.
There is, however, no room for complacency. For one thing, closer scrutiny of the data reveals some worrying underlying trends. Above all, the number of people with the highest number of missed repayments – that is, those closest to losing their homes – does not seem to be falling. This suggests that people in the most severe difficulties are finding it difficult to get on top of their problems.
Second, the economic outlook does not bode well for the repossession figures. Lower growth and higher unemployment will be negative factors. But also lurking in the wings is the very real possibility of higher interest rates.
The single most important explanation for the unexpectedly low level of repossessions during the downturn has been that interest rates – and thus the cost of servicing a mortgage – have never been so low. But with inflation so stubbornly high, the Monetary Policy Committee will have no choice but to begin unwinding that support. And that will have a huge impact on all borrowers.
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