Repossessions. London Mortgage Broker, London Mortgage Advice Friday, 19th February 2010

As more homeowners struggle to recover from unemployment and mounting debts,repossessions and arrears problems could last for a very long time.

The number of borrowers in arrears will rise to 205,000 this year, from 188,000, it predicts.The Council of Mortgage Lenders (CML) expects the number of repossessions to rise by 15 per cent this year, from 46,000 in 2009 to 53,000, and believes that repayment problems could persist long after the recession.

“The pattern of the early 1990s — in which the annual number of possessions exceeded 40,000 for seven consecutive years — suggests that we should expect only a slow recovery from the peak of mortgage payment problems in this cycle.The number of borrowers affected by arrears and possessions will subside only slowly.Rate movements and progress to economic recovery will play a crucial role in shaping the final outcome.Recent price gains had cut the number of homeowners in negative equity from 900,000 in April last year to 650,000.

Figures from the Bank of England show the cost of mortgage finance to be softening.