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Repossesssions lower, but rising
The Council of Mortgage Lenders says that repossessions in the third quarter fell but were higher than in the third quarter of the previous year. The CML has cuts its forecast for repossessions for the year again.
In spite of the improvement in the quarter the CML expects a slight rise in the number of repossessions in 2010.
The forecast increase in mortgage lending is fairly small with an £8bn expected this year and £15bn next year.
As with most forecasts at the moment, everything is very uncertain. The economy certainly is: with the most likely outcome a slow recovery (as has been discussed on this site before). This means, in turn, that interest rates are also hard to forecast.
The other thing that the CML (unsurprisingly) does not mention is the continued high level the ratio of house prices to earnings compared to historical norms. One would have expected a much larger correction: the question is whether quantitative easing has successfully warded this off, or whether the Bank of England will, over the next few years, struggle to raise rates enough to control inflation without causing a house price crash.
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