Home repossessions jumped 30 per cent year-on-year in the first half of 2007, raising further concerns about the impact of higher interest rates and the risks of the subprime market. However, the number of people declaring themselves insolvent fell.

The rising number of repossessions together with the fall in insolvencies was seen by analysts as evidence that mortgage debt was proving more of a strain on consumers than credit card borrowing and personal loans.

Data published on Friday by the Council of Mortgage Lenders, the industry body, indicated that UK consumers are struggling with the five recent interest rate rises which have led to a jump in repossessions.

The number of homes being possessed jumped to 14,000 in the first half of 2007 against 10,800 in the first half of 2006.

The CML said another factor was the rise in subprime mortgage lending to consumers with patchy credit histories. This type of lending now accounts for about 8 per cent of the UK market and involves lending to riskier customers who are more likely to default.

The pressure on home owners is likely to increase as 2m borrowers face a jump in payments in the next 18 months as they come to the end of cheap fixed-rate mortgages and switch to new higher rates deals.

Michael Coogan, director-general of the CML, said: “The sharp rise in repossessions in the first half of this year has been driven by a combination of factors, but the absolute number of repossessions is still low by historical standards.”

The CML pointed out that the figure is much lower than the 76,000 homes repossessed in 1991 at the height of the last recession.

However, Peter Tutton, Citizens Advice policy officer, said the problem was growing. “Local Citizens Advice Bureaus are seeing more people who are falling behind with mortgage payments and, in some cases, threatened with repossession, and we know some people are taking on mortgages that push them to the absolute limit.

“But our evidence also suggests that lenders are sometimes taking possession action as a routine response to arrears, instead of as a last resort.”

Meanwhile new figures from the Insolvency Service showed 26,956 people declared themselves insolvent in the second quarter, a decline of 8.1 per cent against the first quarter of 2007.

Malcolm Hurlston, chairman of the Consumer Credit Counselling Service, a debt advice charity, said that the biggest problem for consumer borrowers was no longer credit card debts, but the rising cost of mortgage debt.

However, Mike Gerrard, head of personal insolvency at Grant Thornton, gave warning that the latest figures were not the turning point.

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