More than 4m families use a credit card to pay mortgages

More than four million families have used a credit card to pay the mortgage or rent in the last year.

The figure exposes the dramatic impact of the economic squeeze on ordinary families.

Settling debts by withdrawing cash on a credit card is probably the most expensive way possible with interest rates as high as 28 per cent, and indicates a disturbing level of desperation on the part of homeowners.

It is revealed in a report from the homeless charity Shelter, which lists a catalogue of other statistics showing the gloom gathering around household finances.

One person in six fears losing his or her home after failing to keep up with payments.

Nearly three million families have had to borrow money from friends or relatives, or take out a personal loan, to pay the mortgage or the rent.

One in four families said difficulties meeting their housing costs every month is causing them stress or depression.

Around 400,000 families said they have fallen behind with mortgage or rent payments.

About 2.2million households spend more than half of their income on their housing costs.

A quarter of households are spending less on food.

One in nine has sold possessions to help pay the bills.

Nearly 7,000 people were interviewed for the report, called Breaking Point, and the responses were extrapolated to represent the whole of the UK. Respondents were from all backgrounds and levels of affluence.

Experts described the findings as 'stark' which showed how finding the money to keep a roof over their head was becoming a serious struggle for many. Many said they stay awake at night worrying about money. 

One in ten has taken on another job or is working overtime because the main job does not pay enough money to keep finances afloat.

Some families said they had cut the amount they spend on buying clothes for their children. 

Nearly 15 per cent of respondents said they were living in a home which is 'too small for their needs'.

A similar number said they did not have the money for essential repairs to their home. 

Adam Sampson, chief executive of Shelter, said: 'Our report shows just how difficult it is for ordinary people to cope with spiralling housing costs, and how desperately unaffordable housing has become.

Taking action: Housing Minister Caroline Flint

'People are going to extraordinary lengths to ensure they pay their rent or mortgage, but the affects of stress or depression, having to sell possessions or deprive the kids of treats can be devastating to family life.' 

A separate survey, from the online credit information firm Equifax, said about 20 per cent of homeowners are worried about having their homes repossessed.

The number of victims this year is expected to jump to 125 a day, compared with 75 a day last year. 

Housing Minister Caroline Flint said: 'We are taking action to support families who may be facing difficulty because of current market conditions, with £9million more for face to face debt advice, and free legal advice to all households at risk of repossession.' 

The two reports come as banks and building societies are constantly raising the cost of their mortgages. 

Some deals, such as two-year fixed rate mortgages, are now at their most expensive for a decade. 

Rate increases over the last six months means a typical £155,000 mortgage is £1,300 a year more expensive than it was in January.