Repossessions on mortgaged property are up by a third on last year, which was two-thirds up on the year before. Increases in mortgage interest and the end of some fixed-rate agreements means that the harsh reality of home ownership is coming home to hard-pressed borrowers. We in the courts, where repossessions are sought, are at the sharp end.

Having dealt with countless possession cases over the past quarter of a century, including the infamous meltdowns in 1988-89, I hope I can offer some useful tips for sailing in these rough seas.

1. Don’t borrow too much in the first place

Seems obvious, doesn’t it? Yet time after time we see borrowers in court who have clearly stretched themselves too far. Time was when lenders applied very strict rules as to the amount that could be borrowed to finance a house purchase. Remember two-and-a-half times annual income? That is all out of the window now. Increased competition for loans, relatively low interest rates and an over-heated housing market can all lead even the most prudent down a path to financial stupidity. Do your sums first. Remember there will be other bills to pay and that you have to eat.

2. Allow for the fact that interest rates may go up

It’s all very well borrowers saying “I can just about afford the payments” without taking into account that, unless it’s a fixed rate agreement, interest rates may go up. That is how so many people have been caught out. Taking your finances to the limit without allowing for possible increases in the interest rate is courting disaster. Make an allowance for “breathing space” in such an event.

3. Allow for the fact that your income may go down

I am not suggesting that one should predict the unpredictable but it is not sensible to assume everything will be rosy when you are aware of factors that may affect family income. Borrowers who end up in court have often failed to factor in the effect that a baby, a long-standing illness or a shaky relationship with a co-owner can have on their plans. The self-employed are also particularly vulnerable when income is not received on a regular basis. Remember, mortgage payments are supposed to be paid on a regular basis, notwithstanding.

4. Prioritise

It is surprising how some people seem to under-estimate the importance of a roof over their head. Going abroad for extended periods without making provision for payment of the mortgage is not uncommon. Expensive cars, clothing, entertainment - indeed bashing the credit card for all it’s worth - may leave little margin for the more important things in life, such as not getting thrown out of the front door by the bailiffs. The Citizens Advice Bureau has excellent money advisers to help you put expenditure in proper order and they are often available at the court on possession days.

5. Fixed rate agreements come to an end at some point

Many borrowers have fallen foul of this in recent months. Having borrowed on short-term fixed rates when interest rates were comparatively low, they now find themselves facing substantial increases in payments once those agreements have expired, as a result of the subsequent increases in interest rates. Of course, there will be new deals to consider but they will be based around the new rates. Take expert advice before entering into any new arrangement.

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