Sharp rise of repossessions predicted

The Council of Mortgage Lenders (CML) said the number of households more than three months behind with their repayments would reach 500,000 in 2009, more than doubling the figure for this year.

The CML said 2009 would be "very tough" because the recession would lead to more unemployment and higher numbers of 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 CML's latest figures show that mortgage lending in November had dropped by a half of what it was in the same month last year, falling to just under £15 billion. House price forecasts under these circumstances are regarded as futile, according to the CML.