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Mortgage Arrears To Hit 500,000 - BBC News

Mortgage lenders predict the recession will lead to a huge rise in arrears among their borrowers in 2009.

The Council of Mortgage Lenders (CML) said the number of households more than three months behind with their repayments would reach 500,000.

That will be more than double this year's expected figure of 210,000.

The CML said 2009 would be "very tough" because the recession would drive up unemployment and lead to 75,000 repossessions among borrowers.

"The economic recession means unemployment is rising sharply, and this will inevitably impact on the number of households facing mortgage arrears," it said.

The international credit crunch of the past 18 months, which has seen some of the UK's biggest lenders collapse or be taken over, has led to an unprecedented drought of funds for home buyers.

The CML's latest figures show that gross mortgage lending in November fell by another 22% from October, to just under £15bn - which was 51% lower than in the same month last year.

With house prices still falling rapidly the CML has declined to make a formal house price forecast for 2009, describing the idea recently as "futile".