The Council of Mortgage Lenders says the number of cases in arrears at the end of September 2008 was 168,000 – 8pc higher than the 155,600 in arrears at the end of June. They are expecting up to 170,000 arrears by the end of the year.

The CML also said that 11,300, properties were repossessed – 12pc higher than the 10,100 in the second quarter of 2008. The CML expects a massive 45,000 repossessions by the end of the year.

Granite, a part of Northern Rock, disclosed that mortgage customers were 90 days or more behind with their payments on more than 2pc of £35.5bn of mortgages. That compares with less than 0.5 per cent of mortgages that were 90 days in arrears in mid 2007.

If you are in financial difficulty here are some useful steps to help you avoid property repossession.

1) WHAT DEBTS DO YOU HAVE - Write them down in full detail.

You need a clear idea of your own financial situation, write down all your debts, using software such as Microsoft Excel can be useful to help include the interest you are paying and prioritise the debts. Make sure this figure covers everything, food, fuel, gas, clothing, loans, council tax etc. Then add 5% to this figure just to be safe!

2) TALK WITH YOUR LENDER

As soon as you miss a payment on a loan, what ever the type, mortgage, credit card or car loan this will trigger the lender to automatically start sending out letters to help resolve this problem. DON’T bury your head in the sand and think that this will all go away, it won’t until you have sorted it out with your lender… to their satisfaction.

Open up a dialog with your bank, make sure that you record all the conversations you have with them (on paper, not audio) take down the date, time, name of the person you are talking with, their position, location and extension number. This is crucial information. Tracking the efforts you have made to fix this problem can be crucial if it is ever taken to court, track every conversation.

Ask your bank for a payment holiday, switch to an interest only loan instead of paying the interest and capital or you can try to extend the life of the loan thus bringing the payments down.

Offer to pay what you can each month, even if it is just a small amount. Be seen to be committed to solving this problem as we have mentioned. A new part time job, recording conversations on paper outlining your calls and letters to the lender will all be favourable for you in a court.

3) TAKE A SECOND JOB – You probably need more money coming in.

At this point we suggest taking up a second job if you think you are going backwards financially, even if its 1 night a week stacking shelves at the local supermarket that money will add up and could be exactly what you need to fix this problem sooner than later. It is also a great piece of evidence in court and with your lender to prove that you are trying to fix the issue yourself.

4) COUNTY COURT JUDGMENTS - Abide by them and have an easier life.

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