Thursday, 31 March 2011

Worrying indicator of more housing misery this year

More mortgage defaults.

Lenders say that more homeowners defaulted on their loans in the first three months of 2011, the first deterioration for nearly two years. And they're worried that the situation will be even worse in April, May and June.

Every three months the Bank of England asks lenders what trends they are seeing in key areas. It's not a survey based on numbers. The Bank asks what the trend is and gives a bigger score where lenders say things have changed a lot.

On balance the percentage reporting that defaults are worse is 11 percentage points higher than those saying the opposite. An even higher share expect an increase in defaults in the next few months.

The Council of Mortgage Lenders has been predicting a harder year for families who are having trouble meeting their mortgage payments.

It is forecasting a rise in repossessions this year to 40,000, from 36,300 last year.

And it says the number of homeowners falling into arrears will increase from 169,600 to 180,000.

Looks like this renewed bout of housing misery may already be with us.

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