Mortgage brokers should take notice of the facts and not be lulled into a false sense of security by arrears forecasts, says sale and rent back firm, Residential Property Solutions Ltd.
The Council of Mortgage Lenders has downgraded its repossession forecasts from 53,000 to 39,000 and has also downgraded its arrears figures from 205,000 to 175,000 for mortgages which are 2.5% or more in arrears.
Pete Thomson, managing director of Residential Property Solutions Ltd, says: “I hope the CML’s revised forecasts are correct, but there is strong evidence which suggest that their dreams may not come true. Citizens Advice has reported that 25,360 people sought its advice between April and June this year regarding mortgage payment problems and has said that it believes the numbers can only escalate.
“Lender forbearance has, in many instances, simply delayed the inevitable and public sector job cuts are going to put a huge strain on the finances of thousands of homeowners. What’s more, when interest rates do rise, as they will do eventually, thousands of borrowers are going to suffer payment shock. For some, it will be the straw that breaks the camels back.”
Residential Property Solutions Ltd says that the recently regulated sale and rent back sector now offers struggling homeowners a practical, safe and immediate solution to the spectre of repossession.
Thomson adds: “Mortgage brokers and lenders should consider sale and rent back as a potential solution for hard pressed homeowners. Regulated firms such as Residential Property Solutions Ltd will arrange for all homeowners to receive professional advice before committing to a deal.”