Graphic: the state of housing

More than one in five homes on the market are there because their owners cannot afford the mortgage repayments, The Times has learnt.

A survey of estate agents suggests that at least 5,000 properties a week are being put up for sale by “forced downsizers” – people who are in financial difficulties.

Lenders believe that repossessions have soared by 70 per cent in 2008 compared with last year. Quarterly figures to be published today by the Council of Mortgage Lenders will show that repossessions are expected to have risen from 18,900 in June to at least 45,000 by the end of December. Figures to be published by the Ministry of Justice are expected to point to soaring mortgage arrears.

Alistair Darling is under pressure to use Monday’s PreBudget Report to help struggling homeowners.

In a survey by the National Association of Estate Agents for The Times, more than half the agents said that at least 20 per cent of their sellers were having difficulties paying their mortgages. One in five agents said that such sales made up 50 per cent of all properties displayed in their windows.

More than 27,000 properties have come on to the market in the past week, according to the property search engine Globrix. The NAEA survey suggests that at least 5,000 of these may be “forced” sales.

In recent months banks have withdrawn competitive mortgage deals for all but the most cash-rich. Those with little equity in their homes have found themselves ineligible for new deals and forced to pay their lender’s standard variable rate. Rising unemployment may also be a factor.

Peter Bolton King, chief executive of the NAEA, said: “It is those homeowners who were on cheap fixed-rate mortgage deals who cannot replace them and are struggling with the rise in repayments.”

In August 2006, the average fixed rate was 5.18 per cent, according to the Council of Mortgage Lenders. A borrower with a £150,000 loan who came off this rate in September and had to move to the average standard variable rate of 6.36 per cent would have had to find an extra £147 a month.

The mortgage drought has continued despite cuts in the Bank of England base rate and the outlook is one of “continuing weakness for housing and mortgage markets in the coming months”, according to the CML. Although mortgage lending increased by 7 per cent from September to October, the total amount lent was 44 per cent lower than in October 2007.

Rightmove, the property website, said last week that asking prices had fallen by 2.9 per cent in a month. Average prices are falling at a rate of £78 a day. Savills forecasts that the average value will drop from £182,080 last December to £136,123 at the end of 2009.

The number of househunters has fallen from 211 to 196 a month per agent, according to the NAEA. However, the number of first-time buyers is increasing, it said. Agents say that cash-rich buyers are snapping up homes at auction in areas that have already suffered big price falls.

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