In 2014 the Department for Communities and Local Government commissioned Professor Muellbauer, of Oxford University, to update his forecasts of mortgage arrears and possessions in the UK.
This research report sets out changes to the forecast model and the revised forecasts since the last report. The update led to the inclusion of 10 extra data observations, a number of data revisions and inclusion of a measure of credit availability in the mortgage market derived from the Bank of England’s Bank Lending Survey.
The forecasts draw upon a range of economic growth and interest rate scenarios based on underlying forecast data from the Office for Budget Responsibility, and from Oxford Economics for comparison.
The new forecasts represent an improved outlook for both arrears and possessions compared to the previous forecasts, mainly because of the postponement of an increase in interest rates.