House repossessions soared by 48 per cent to 18,900 in the first six months of 2008 as the credit crunch and stricter lending regimes forced more people into default, particularly at the riskier end of the market.

Figures released today by the Council of Mortgage Lenders (CML) showed that lenders took back 6,100 more houses in the first half of the year compared with 2007.

The numbers tally with Financial Services Authority data released this week that revealed 9,152 repossessions in the first quarter, up from 6,471 last year.

CML said it is maintaining its forecast of a total of 45,000 repossessions and 170,000 mortgages in arrears of more than three months by the end of 2008.

The number of repossessions in the first half represented 0.16 per cent of 11.74 million UK home loans. "The possession rate now is similar to that of the late 1990s, but remains less than half the rate experienced in the early 1990s," the CML said.

The total number of households with mortgage arrears of three months or more was 155,600 at the end of the first half, up from 120,800 in the same period last year.

CML said the impact of the credit crunch had hit the adverse credit sector harder than most of the mainstream market. "This is not surprising, given the greater inherent propensity for default in the adverse credit sector due to borrowers' past credit experience," it said.

"It is exacerbated by a greater proportion of adverse credit loans being linked to the London interbank offered rate, which remains stubbornly high. The dramatic reduction in the availability of new adverse credit mortgages has also affected borrowers who might otherwise use remortgaging as a strategy to help manage their payments."

Michael Coogan, CML director general, said the council would continue to press the Government to create a safety net for vulnerable borrowers facing a short-term loss of income.

"No-one wants to see a household lose their home and repossession typically leads to a loss for the lender as well," Mr Coogan said.

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