Hard year ahead for UK investment property loans market
December 22, 2008 by OPPE News
The UK investment property loan market could find it hard to recover next year, a lenders group has suggested.
The Council of Lenders (CML) said 2009 is going to be a “very tough” year for the country’s home loan market.
However, the second half of the year could see a recovery start, experts added, although transactions are likely to be half the level seen in 2007.
The CML said it expects gross mortgage lending of around £145 billion next year, down from around £258 billion in 2008, and £363 billion in 2007.
The group said:
“We anticipate the number of repossessions to be around 75,000 in 2009 - although a significant number of these are likely to be cases where the property is abandoned or where property fraud has been perpetrated, and a sizeable share are expected to be buy-to-let mortgages.”
In a detailed but “best estimate” breakdown of predictions, the CML said it expects only 700,000 property sales next year, compared to 1.7 million in 2006.
The winners could be existing borrowers who remain unemployed, with many variable rate deals getting cheaper.
However, a rise in unemployment will inevitably lead to more households facing mortgage arrears, the CML added.
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