More than one million households in England could face repossession in the coming year, warns the homelessness charity Shelter. The organisation has seen a steep rise in people seeking help for not being able to repay their mortgages. In 2007 there were 80,000 people seeking help, an increase of 10,000 from the year before.



Adam Sampson, chief executive at Shelter said, ?Shelter has seen a massive increase in people coming to us with mortgage problems, and with repossessions set to rise throughout this year, we simply haven't got the resources to help everyone.?

According to the new report from Shelter, called Mortgages and repossessions, there has been an overall increase in repossessions since 2004. One of the reasons for this is the increase in house prices. The rise has made the houses too expensive for many people to buy. Many are therefore looking to engage in more risky borrowing, such as adverse mortgages, to be able to afford a home. When they cannot pay back the high interest rates on the mortgages it then leads to repossessions. Both arrears and repossessions are higher among sub-prime mortgage customers than among customers of mainstream, or prime, mortgage lenders, according to the report.

Although the numbers look depressing the level of repossession is, however, still not as high as in the early 1990s. But Shelter claims that there are contributory factors now that are much more significant than they were back then. One example is that the way in which debts are managed by lenders has changed. Now, it is more common for non-housing debts to be secured on the borrower's home.

Shelter is now calling on the government to do something about the problem. It suggests that it should set up a free, confidential advice service, together with the mortgage lenders, to support those affected by the crisis. The service should give people advice in an early stage of their problems and should work both through a telephone helpline and online support.

Adam Sampson said, ?A free and impartial advice service is a much needed first step on the way to stop mortgage arrears and repossessions escalating. It also helps thousands of ordinary people to keep a roof over their heads.?

Shelter is also criticizing the safety net for people getting into trouble, saying that both state welfare and private insurances are inadequate. Borrowers who have troubles are instead forced into further borrowing, which only leads to more problems.

?Instead of helping struggling homeowners to get back on their feet, the actions of some lenders, combined with a lack of government support, simply exacerbates their problems and condemns them to the despair and misery of losing their home.?

To help struggling borrowers the organization suggests, except from the helpline, that the Financial Service Authority should be harder on lenders who sell customers unaffordable products. It also suggests that county court judges should take a tougher line against unfair mortgage lenders and that a national mortgage rescue scheme should be set up to allow homeowners to remain in their homes, even tough they have difficulties, without the drawbacks of privately run schemes.

?The government, mortgage lenders and the Financial Services Authority must take responsibility and start repairing the broken state safety net to ensure that if people face difficulty, there is protection in place and somewhere to turn for advice,? said Adam Sampson.

It is not only Shelter who points out the risks on the market, the Financial Services Authority has also warned that one million homeowners could loose their homes in 2008 as the economy slows down, and the Council Mortgage Lenders has predicted a 50 per cent increase in repossessions this year. A recent Financial Service Authority investigation in the sub-prime lending market showed that there was a serious cause for concern about the lending practices in the sector.