The number of mortgages in arrears will rise beyond 170,000 in 2008, according to a new report by the Council for Mortgage lenders (CML).
The number of mortgages that are at least three months in arrears has been rising steadily throughout the year. The CML reports that there were 168,000 mortgages in arrears at the end of September. This is an 8% increase in the figures for June 2008.
As the economy worsens, the CML is predicting that there will be at least 170,000 households more than three months in arrears by the end of the year.
A rising number of buy to let loan defaults are contributing to the worsening arrears statistics.
Landlords are coming under increasing pressure as buy to let mortgages become more expensive and difficult to arrange. Falling rents and over supply of rental properties in some areas, particularly city centre locations, is squeezing margins even further.
As the number of mortgage arrears increases, so will the number of repossessions. The CML expects around 45,000 repossessions this year.