The Council of Mortgage Lenders (CML) have released new figures showing a dramatic rise in the rate of home repossession, with 48% more properties taken into repossession in the first half of the year compared to the same period in 2007. In total, 18,900 homes were seized.

The number of mortgage payers in arrears was also up sharply, rising 29% to 155,600.

While the CML acknowledged that the figures were likely to continue to get worse, a spokesperson stressed that the number of homeowners facing real problems was still small when compared to the 11.75 million open mortgages in the UK, and that the hardest hit mortgage payers were those with sub-prime deals which have become more expensive  and harder to obtain because of the credit crunch.

The latest figures show a slight fall in personal insolvencies, with 24,553 people declaring themselves insolvent in the second quarter of the year. This is a 2% fall on the first quarter, and over 8% less than the same period in 2007.

Although the figures appear to be bucking the predicted trend, it’s thought that the credit crunch may be paradoxically responsible - credit has been harder to find, and people are more conscious of the effects of borrowing, leading to fewer people taking on more than they can afford.

It remains to be seen whether this effect will last, although most experts still expect a surge in insolvencies over the coming months and years.

A new report predicts that 1.7m mortgage payers could face negative equity within the next year, as house prices continue to slide.

Credit ratings agency Standard & Poor (S&P) predict that prices will fall a further 17% over the next year, resulting in 14% of UK mortgage holders finding that their home was worth less than their outstanding mortgage balance.

The current number of households in negative equity is around 70,000 or around 0.7% of homeowners.