Drop in CML repossession figures could be 'bad news'

A drop in the number of expected repossessions could actually be bad news for homeowners and buy-to-let landlords, it has been claimed.

Latest Council of Mortgage Lenders figures showed that 48,000 repossessions are now expected by the end of the year, a number that was originally placed at 75,000.

This may not be the good news it seems as more borrowers will now take up the "interest only" option, according to ukinsolvencyhelpline.co.uk.

Ian Boden-Smyth, a spokesman for the organisation, warned that a generation of homeowners, who do not actually own their properties, could now emerge.

"People are keeping up with repayments, but not eating into the actual debts," he said.

"There is a huge proportion of people in this country with negative equity and we're seeing people who have got a mortgage and a secured loan which outweighs the value of the property. They could never sell the property. They're prisoners in their own homes," he added.

According to the CML figures, the total value of outstanding loans now stands at £1,200 billion, an increase of one per cent compared to a year earlier.

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