Last week brought an unusual development; the Council of Mortgage Lenders (CML) revised down its projection of the number of housing repossessions. At this stage in the recession of the early 1990s, the numbers were consistently revised higher. Why the difference?

The CML still expects a hefty 65,000 this year, though that is down from an original estimate of 75,000. But the pain will be milder, it says, because of “a combination of lower interest rates, measures to reinforce the forbearance shown by lenders to borrowers in difficulty and improved government support for homeowners”. It also thinks the mortgage outlook is a little better, expecting a fall in net lending of £5 billion this year, compared with a previous prediction of a £25 billion drop.

There will be those who say action to reduce the number of repossessions merely papers over the problem, which could manifest itself at a later stage, particularly when interest rates start to rise, probably next year. Some mortgage rates have already risen.

In general, though, it makes sense for lenders to try to keep people in their homes. Repossessions are not directly comparable with foreclosures in America. There, former owners often just hand back the keys and with it their liability. Here, many of those repossessed in the last recession took years to clear their debts. Some have yet to do so.

In either case, such properties are bad for the market. Anecdotal evidence suggests it is not unusual for foreclosed homes in America to be trashed by their owners. Repossessed properties here are usually auction fodder.

For those who did bite off more than they could chew, what matters is their ability to trade their way out of it. Figures from Her Majesty’s Revenue & Customs show there were 62,000 residential transactions last month, up 7% on April and the best since October.

Two of the ratings agencies have different takes on the UK housing market: Fitch says 10% of “prime” borrowers are already in negative equity and predicts this will rise to 23%, making it hard for people to trade out. Standard & Poor’s, suggested that, in contrast to Spain and Ireland, the housing market here will be underpinned by supply shortages. It thinks prices will stabilise 7% below last December’s level — roughly where we are now. This debate is far from over.

home.economics@sunday-times.co.uk

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