The CML, Council of Mortgage Lenders, has reduced its estimate for the number of repossessions expected to take place this year. The good news coincided with the extension of a scheme which offers free debt advice on repossessions. The provision of last-minute debt advice has allowed many consumers to keep their homes, and negotiate new repayment arrangements with their lenders.

At the end of last year, the CML predicted that 75,000 homes would be repossessed in 2009; however it has now amended that figure to 65,000, a reduction of more than 13%. This is still considerably more than in 2008, when only 40,000 repossessions occurred; nevertheless, any reduction in the original estimation will be welcomed by hard up consumers looking for a way to get out of debt.

The Council were quick to point out that the amendment to its prediction did not signal a recovery in the housing market, and they went on to say that they expected activity in this area would remain subdued for a while.

Many consumers have been struggling to keep up their monthly mortgage commitments since the recession really took hold some months ago. There has been an increase in bankruptcy cases as well as personal insolvency across the UK, with a lot of individuals embarking on Debt Management Plans, or requesting IVA advice, as a way to solve their debt problems.

In the first three months of 2009, there was a 50% increase in UK repossessions. This has been largely attributed to a rise in the number of individuals that are loosing their jobs and subsequently running up significant mortgage arrears. Whilst having to cope with household bills, other unsecured borrowings and credit card debt, it is almost inevitable that total financial collapse could follow.

The main reason that the CML has reduced its forecasts is the record low interest rates. The Bank of England base rate was as high as 5% nine months ago. It has been cut several times and is now at a record low of just 0.5%. This has meant that for many mortgage payers, their monthly repayments have actually come down, in some cases considerably. Coupled with the fact that lenders are keener to negotiate with the consumer, and avoid having to take the home if at all possible, the overall repossession outlook is not quite as gloomy as it was.

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