Urgent measures are being planned by the Government to curb the rise in repossessions, as figures revealed yesterday that nearly a thousand borrowers a week had their homes repossessed between July and September.

Lenders will be forced to wait for up to four months before starting proceedings against struggling homeowners under rules to be announced in the Pre-Budget Report on Monday. Set to last for at least a year, the scheme will give borrowers three months’ grace after missing a mortgage payment before facing the loss of their homes.

Many of the biggest banks say they wait until borrowers are three months in arrears before issuing repossession proceedings, but Northern Rock and many sub-prime lenders have come under fire for being too quick to attempt repossession and sale of properties before house prices fall further.

The number of people falling behind with their payments surged by 12,000 between July and September, pushing the total number of borrowers in arrears to 168,000. This has raised fears that as many as 200,000 could be in arrears by Christmas, storing up a timebomb for next year.

Repossessions are set to jump by 70 per cent this year to 45,000, figures from the Council of Mortgage Lenders indicate. Landlords were also hit, as falling house sales forced more rental properties on to the market, dragging rents down. The CML said that the number of buy-to-let borrowers in arrears jumped by 43 per cent in the three months to September compared to the previous quarter.

A spokesman from Nationwide Building Society, the second biggest mortgage lender, said: “Repossession is always the last resort. We wait at least three months before starting any court action as a matter of course.”

But debt charities cautioned that the Government’s measures would do little to curb the rise in repossessions.

“It is a timebomb, and the number of people in arrears is the flashing red light. While the new scheme might help people who can turn around their circumstances quickly, soaring unemployment and the economic slowdown mean there is no getting away from the fact that repossessions will soar,” said Chris Tapp, of Credit Action, a debt charity.

Councils, meanwhile, have warned that the increase in repossessions could force the council house waiting list up to 5 million by 2010. House prices have fallen by 15 per cent in the past year, figures from the Halifax show, while economists say unemployment could rise to more than 3 million by 2010.

Data from the Ministry of Justice showed that repossession orders granted by the courts in England and Wales rose by 5,700 to nearly 30,000 between July and September – though nearly half were suspended.

The Government’s initiative comes just days after its scheme to force lenders to negotiate with borrowers in difficulty came into force. Lenders must now prove they have given homeowners alternative solutions before seeking a repossession order from a court.

Three months ago the Government announced that it was putting up £200 million to help about 6,000 families avoid repossession. Under the scheme, the homeowners would be offered the chance to sell part or all of their home to a registered social landlord and then rent it back at an affordable rate.

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