100 families a day lose their homes as repossessions soar 50% to 12-year high

Between January and June, 18,900 families - equal to more than 100 families every day - lost their homes after failing to pay their mortgage.

The number who will be repossessed is set to keep on rising as the lethal combination of poor pay-rises and soaring household bills takes its toll.

In a sign of the impending crisis, a shocking 155,600 people have not paid a penny of their mortgage for more than three months.

The Council of Mortgage Lenders predicts 45,000 people will have had their homes repossessed by the end of the year

Unless they find the money quickly, they will also face the ghastly experience of losing their home, a disruption to family life similar to divorce.

The figures, published today by the Council of Mortgage Lenders, graphically illustrate the human toll of Britain's economic problems.

With gas bills soaring up to 35 per cent and massive hikes in food and fuel prices, it has never been so difficult to find the money to pay the mortgage.

To make matters worse, anybody whose mortgage deal has run out and needs to find a new deal will be hit with a sharp rise in the monthly cost.

Adam Sampson, chief executive of the charity Shelter, said the figures are 'shocking', but official forecasts predict they will get even worse.

By the end of the year, the CML expects a total of 45,000 people will have been repossessed, the highest number for 13 years.

He said: 'With current fears that unemployment is set to grow, there is no doubt we are inching ever closer to the dark days of the last repossession crisis.

'We know that behind these figures are thousands of families facing sleepless nights worrying about how to make their next mortgage payment, and many thousands more will be waking up to the frightening reality of repossession.'

The worry for many families who are struggling is the options that used to be open to them to find more money have been closed by the credit crunch.

In the past, they could take out an unsecured personal loan, remortgage or borrow more money on their credit cards to pay their mortgage.

But banks are so cautious about lending that many people are now being refused.

Michael Coogan, CML's director general, said: 'It is inevitable that more borrowers' coping strategies will come under pressure in current conditions than in the unusually benign years of the last decade.'

The figures come in the week the Financial Services Authority, Britain's financial regulator giant, accused some lenders of being 'too ready' to repossess.

Rather than give their customer time to find the money, they are rushing them to court to start eviction proceedings.

Sue Edwards, head of consumer policy at Citizens Advice, said: 'We are continuing to see high numbers of people coming to see us with mortgage and secured loan arrears.

'Yet in too many cases, lenders are still not doing everything they can to help borrowers in trouble, piling on extra charges, not negotiating with borrowers to come to a workable solution over repayment arrangements and using court action as a first rather than a last resort.'

For families who lose their homes, the consequences are heart-breaking, with many parents saying they feel like complete failures.

They are often squeezed into smaller rented accommodation or council housing, children may have to change schools and lose contact with their friends.

Yesterday the Local Government Association said it fears the waiting list for council housing could top two million families by 2010.

At present, the waiting list stands at 1.6million, but they expect this to rise, partly fuelled by rising numbers of people losing their homes.

Claire James, policy officer at the Family and Parenting Institute, said: 'We fear that the credit crunch is going to claim yet another victim – happy family life.

'Research has shown that families forced to live in homes that are unfit for their needs suffer tremendously under the strain.'

Around 20 per cent of repossessed homes are sold at auction, but many are selling for a huge discount to the price that was paid.

A repossessed two-bedroom flat in Aylesbury, Buckinghamshire sold for £117,000 last month, just 18 months after it was bought for £207,950.

Yesterday the CML said many victims are 'sub-prime', who have a troubled credit history which means they are only given more expensive loans.

But it pointed out that 'the overwhelming majority of the UK's borrowers continue to pay their mortgages in full every month, and will continue to do so.'

There are around 11.7million mortgages in Britain, although many people have more than one, such as buy-to-let investors.

The repossession figures may be rising quickly, but they are still far below the record in 1991 when 75,500 people were repossessed.