The number of homeowners having their houses repossessed will soar by 50 per cent to 45,000 next year, the Royal Institution of Chartered Surveyors (RICS) predicts.

RICS’s survey comes as the Council of Mortgage Lenders (CML) reveals that gross mortgage lending slumped nearly 8 per cent last month to its lowest level since July 2005.

It said that lending would continue to be subdued because of the unavailability of funding.

RICS said that homeowners seeking to refinance mortgages may struggle as lenders become less willing to give loans, owing to the continuing turmoil in credit markets.

Simon Rubinsohn, chief economist at RICS, said: "The effect of the credit crunch will dissipate slowly, meaning that those seeking to obtain finance in the first half of 2008 may struggle.

“However, the employment picture should remain firm throughout the year, helping to prevent significant numbers of repossessions and the subsequent influx of supply into the market."

Even with an increase of 30,000 this year to 45,000 next year, the number of repossessions will be significantly down from the heights reached in the early 1990s, when the figure nearly reached 80,000 because of the recession and high interest rates.

Mr Rubinsohn said: "[Next year] will prove a difficult year for the housing market, but with falls likely in the base rate, the housing market should be provided with a stable platform.”

RICS said that house prices should remain broadly unchanged next year and that the market should recover quickly from any short-term falls.

Prices will be bolstered by expected interest rate cuts by the Bank of England and by pent-up demand from prospective buyers biding their time for a softening in the market.

The CML said that mortgage lending fell to £30.7 billion in November, down from £33.2 billion last year and 33.5 per cent in October as the market slowed.

Michael Coogan, the director-general of the CML, said that lending would be subdued in the coming months primarily a result of a lack of available funding rather than a lack of consumer demand.

Howard Archer, the chief British and European economist for Global Insight, is predicting that house prices will fall by 3 per cent next year, revising earlier expectation of flat prices.

He said: "The credit crunch and sub-prime mortgage concerns mean that lenders are becoming much more careful about whom they lend to, and on what terms.

"Furthermore, the credit squeeze is making it increasingly difficult for mortgage lenders to get hold of adequate funds to finance new mortgage business.

"This is bound to weigh down on housing market activity."

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