The Council of Mortgage Lenders has predicted that there will be 500,000 householders in arrears by the end of next year.
There was further bad news for the property market today following a prediction by the Council of Mortgage Lenders (CML).
The organisation has estimated that half a million households will be in arrears at the end of 2009, although it stressed that the forecasts were indicative and not precise. It also revealed that mortgage lending dropped by 22 percent in November and 51 percent compared with the same month in 2007.
However, while admitting that the market will remain "extremely subdued" in the next 12 months as unemployment rises, CML director general Michael Coogan said that both lenders and the government were trying to remedy the situation. The government has, among other measures, stressed to lenders in the past few weeks that repossession should only be used as a last resort.
Mr Coogan said: "Recent glimmers of light in terms of government intervention to improve conditions to support new lending are helpful, but more will be needed. 2009 will be a challenging year, but borrowers who remain in employment will see some benefits in the form of lower mortgage rates."
The Association of Mortgage Intermediaries (AMI) expressed surprise at the prediction. However, it said that the figures mean the government should "swiftly" bring in measures laid out in the recent Crosby Review, including the guarantee of new mortgage securities.
