What is the Council of Mortgage Lenders?
The Council of Mortgage Lenders (CML) is a trade association for mortgage lenders in the United Kingdom. The organization represents more than 90% of the residential mortgage lending market in the UK and provides data and analysis on the mortgage market.
What are Repossessions?
Repossessions are a legal process where a lender takes possession of a property from a borrower who has defaulted on their mortgage payments. Repossessions occur when borrowers are unable to make their mortgage payments and have exhausted all other options to keep their homes.
The State of Repossessions in 2009
According to the CML, the number of repossessions in the UK was expected to rise in 2009 due to the economic recession. The CML predicted that around 75,000 homes would be repossessed in 2009, up from 40,000 in 2008.
Reasons for the Increase in Repossessions
The increase in repossessions was attributed to the following factors:- Rising unemployment rates- Falling house prices- Tightening credit conditions- High levels of personal debt
Impact of Repossessions on Borrowers
Repossessions can have a devastating impact on borrowers, both financially and emotionally. Borrowers who lose their homes are often left with significant debts and may struggle to find alternative accommodation.
Impact of Repossessions on Lenders
Lenders also suffer as a result of repossessions. When a property is repossessed, the lender is often unable to recover the full amount owed on the mortgage. This can result in significant losses for the lender.
Steps to Avoid Repossession
Borrowers who are struggling to keep up with their mortgage payments can take the following steps to avoid repossession:- Contact their lender as soon as possible to discuss their situation- Consider alternative payment arrangements, such as extending the repayment term or switching to interest-only payments- Seek advice from a debt advisor or housing charity
Government Support for Borrowers
The UK government introduced a number of measures to support homeowners who were struggling to keep up with their mortgage payments, including:- The Mortgage Rescue Scheme, which allowed homeowners facing repossession to sell a share of their home to a housing association- The Homeowner Mortgage Support Scheme, which allowed borrowers to defer up to 70% of their mortgage payments for up to two years
Impact of Government Support
The impact of government support measures was limited, with many borrowers still struggling to keep up with their mortgage payments. The CML argued that more needed to be done to support struggling homeowners.
Future Trends in Repossessions
The CML predicted that repossessions would continue to rise in the coming years, due to the ongoing economic uncertainty and tightening credit conditions. The organization called on lenders and the government to work together to support struggling borrowers.
Conclusion
The CML’s prediction that there would be no let up in repossessions in 2009 proved to be accurate, with the number of repossessions rising significantly. While the UK government introduced a number of measures to support struggling homeowners, many borrowers were still unable to keep up with their mortgage payments. The CML called for more support for struggling borrowers and predicted that repossessions would continue to rise in the coming years.