The Council of Mortgage Lenders (CML) have warned that they expect house repossessions to increase again next year.
The council updated their outlook for the UK property market and believe repossessions will increase from 40,000 in 2011 to 45,000 in 2012.
The CML also believe that mortgage rationing, one of the key reasons for the lack of sales of late, will stay in place until at least the end of next year, adding that they believe sales for this year will be even lower than they firth thought, at just under 850,000.
The CML predict sales to increase next year to around 900,000, the same figure as 2008, although they expect lenders to remain cautious about the size of mortgage they offer.
The CML explained, “The aftermath of the global financial crisis continues to have a pronounced impact on mortgage and housing markets.”
“Property transactions look set to remain at the low levels of the past few years.
“Lenders will continue to have only a modest risk appetite, and this will limit lending at high loan-to-value ratios,” the CML added.
“Despite the pressure on household finances, we expect the vast majority of households to keep up with their mortgage payments, helped by a relatively gentle trajectory for interest rates.”