2007 saw house repossessions at their highest level since 1999 the Council of Mortgage Lenders (CML) has revealed, with over 27,000 homes reclaimed.

The number of properties repossessed was up by 21 per cent in 2007 from the previous year, and almost three times the figure in 2004 of 8,200.

At the same time, the number of homeowners with at least three months of arrears also rose to 129,800 up by 8.6 per cent on 2006.

Despite the repossession figures being the worst for eight years, they are still better than had been expected by the industry.

The CML said the figure was down ten percent on the year’s forecast and represented fewer than one in 400 of the 11.8m mortgages in the UK.

Global Insight’s chief UK economist Howard Archer says: “The full effect of the marked overall increase in interest rates between August 2006 and July 2007 is still feeding through.

“While the December and February interest rate cuts by the Bank of England will help matters, there is a danger it could be too little for many people.”

Chiltern’s Joanne Gill says: “We’ve seen an increase in the number of calls this month from people struggling with their priority debts, like mortgage payments and utility bills.

“Fortunately our debt management plans prioritise these debts first, enabling customers to adjust their finances to a more affordable level and temporarily ease their debt stress.

“With many energy suppliers now raising prices too, it’s important to ensure that household finances can cope with the increase in payments. That’s why if people are struggling with their debts it’s worth contacting an impartial debt company like Chiltern, as there are many options available.”