RTTNews - Monday, U.K.'s Council of Mortgage Lenders lowered its forecast for repossessions in 2009 saying that lower interest rates are helping borrowers.
Repossessions are expected to total 65,000 this year, down from an initial estimate of 75,000. The CML also expects around 360,000 mortgages to be in arrears equivalent to 2.5% or more of the mortgage balance by the end of the year.
Large cuts in interest rates have benefited many, making it easier for households who suffer a loss of income to continue to pay their bills, the CML said in a statement.
At the same time, the CML left its forecasts for housing transactions and gross lending unchanged. Housing transactions are projected to total 700,000 and gross lending would be worth GBP 145 billion.
The outlook for net lending appears less negative than previously forecast. The CML now expects net lending to fall by only around GBP 5 billion, compared with the GBP 25 billion contraction previously anticipated.
The CML observes that the raft of measures taken by the authorities have stabilized the economy and will sow the seeds for a recovery over time, including in the housing market. But the improvement is likely to be slow and drawn out, especially as the extensive fiscal, monetary and credit support measures are gradually unwound.
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