RICS: CML repossession data

Commenting on CML repossession figures, Simon Rubinsohn, RICS chief economist said; "CML data released this morning demonstrates that the worsening economic climate is beginning to have a marked impact on both the levels of arrears and repossessions in the property market. And with unemployment set to rise sharply as the recession bites, it is inevitable that both indicators will rise further in 2009. The full impact may, however, be mitigated to some extent by the actions of lenders and the government, both of whom are devising strategies to limit the fall-out from the current crisis.

The aggressive response from the Bank of England should also provide some much needed support. Base rates are likely to fall to a low of 1.5% over the coming months helping to cut borrowing costs and ease the pain of financing existing mortgages. Ominously, however, the buy to let market is now accounting for an increasing share of mortgage arrears. The latest RICS survey of the residential lettings market shows rents are now declining which, if persistent, could exacerbate the pain in this sector."