The Council of Mortgage Lenders says that it overestimated how many houses will be repossessed in UK this year.

The group had previously predicted 75,000 families losing their homes through repossession. However the number has been revised and is expected to be lesser by 10,000. The revised prediction for the current year is now 65,000.

Although this is better news, it is still a marked rise from the 40,000 repossesions in 2008. There will still be far too many people trying to stop repossession of the roof over their heads.

Why Less Repossessions?
Although less number of people will be losing their homes, it is no consolation to those who willdue to financial distress.

The reason is attributed to the government scheme offering last-gasp free advice in courts about repossessions in England. This scheme, which is being extended to all courts in England via atleast one advisor in each court, is primarily aimed at people who are often unaware of the extent of their housing difficulties or who believe nothing can be done to keep them in their homes.

Another reason is low interest rates. As the Bank of England's base rate is currently 0.5%, the standard variable rate most lenders are charging is about 2.5 to 3% - which is more managable by many families than the higher rates.

Are These Green Shoots of Recovery?
This does not automatically mean that the recovery in housing market is about to begin, warns the CML. As the lending is still tight, it says that the housing activity will "remain subdued" for some time yet.

"Nevertheless, we expect that further job losses and disruption to incomes will cause the number falling behind with their mortgage payments to rise over the course of 2009 - but at a slower pace than we had previously anticipated," the group said.

 

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