Council of Mortgage Lenders Housing Estimates Positive and Negative
The Council of Mortgage Lenders has dropped some discouraging news about house repossessions. They predict this year as well as into 2012 repossessions will continue to rise. There were approximately 36,000 last year. The CML expects that number to increase this year to an estimated 40,000. An additional 5,000 can be added to the figure for next year, adding to the difficult task of raising consumer confidence.
The CML is basing their estimations primarily on inflation. As the rate of inflation continues to creep up, consumer spending becomes the victim and households suffer.
A positive piece of data the CML is predicting for next year is the number of people in arrears. They believe only a slight increase will take place from 170,000 in 2010, to just 180,000 for each of the next two years.
The Council is also slightly bullish on the Bank of England base rate. (The base rate is the reference figure which all banks work from when calculating interest rates). They believe the rate will continue at 0.5% for most of the remainder of this year. A marginal tightening process will take place over the course of next year.
The Council commented on lending in general, saying: "Although recent Bank of England credit conditions surveys indicate an ongoing improvement in credit availability, the underlying position remains challenging. Under such conditions, lenders will continue to have only a modest risk appetite, and this will limit lending at high loan-to-value (LTV) ratios."