The Mortgage Lender is urging lenders to drop early redemption charges for customers in arrears in a bid to cut repossessions and to slash the £650m cost to the country.

David Titmuss, managing director of The Mortgage Lender, says there’s around 30,000 mortgages in trouble and the signs point to a substantial increase over 2006’s 17,000 home repossessions.

Titmuss said: “The signs are that there will be many more repossessions in 2007, maybe passing 1999’s 29,990 figure. The share of household income a mortgage absorbs in 2007 is higher than in 2006, up from 15.1% to 17.3%, which means people are getting into arrears more quickly.”

However, the repossession market peaked in 1991 with 134,000 repossession warrants issued according to the Office of National Statistics.