The government may not have gone far enough in its efforts to keep Britons in their homes over the course of the ongoing financial crisis, deputy leader of the Liberal Democrats Vince Cable has warned.

His comments coincided with the publication of new data from the Ministry of Justice (MoJ) showing that the number of homes repossessed by mortgage lenders increased 12 per cent in the third quarter of this year.

Mr Cable warned that in the current economic environment, many Britons are unable to make ends meet, with household finances stretched beyond breaking point due to insurmountable debt responsibilities on loans, mortgages and credit cards. So too, the lack of cheap loans and other forms of credit on the market and constricted lending criteria has also effectively left many people throughout Britain with nowhere to turn. Indeed, figures from the MoJ show that while the total number of repossessions rose to 11,300 during the quarter, there was also substantial growth in the amount of people who are in mortgage arrears. According to data from the ministry, 168,000 people were found to be in such a situation during this time, an increase of eight per cent.

Commenting on the figures, Mr Cable warned that both figures may rise substantially in the near future.

“Even with falling food and energy prices, some families have already been stretched to breaking point by colossal debts and the high cost of borrowing. The steep rise in the number of people in arrears makes it highly likely that a flood of repossessions is just around the corner [...] There is a real danger that government proposals to prevent repossessions have not gone far enough. Following this months landmark ruling there is a danger that some unscrupulous lenders will simply bypass the courts. We must ensure that peoples homes are only ever repossessed as an absolute last resort,” he urged.

Meanwhile, the BBC reports that Margaret Beckett, Labour housing minister, insisted that the government is acting to make sure that vulnerable people are kept in their homes during this period of economic difficulty.

Among the new measures legislated by the government is a new court protocol which bestows a burden of proof on mortgage providers to demonstrate that they are pursuing other alternatives to repossession and are serving their customers interests.

However, Michael Coogan, director general of the Council of Mortgage Lenders (CML), warned that there may well still be a sharp rise in the number of people who are forced to hand back their homes, regardless of how well they are treated by their mortgage provider.

Figures from the CML indicate that the current housing market may be proving particularly difficult to those with buy-to-let investments. Repossessions in this sector were found to outstrip figures for the traditional residential mortgage market.

Consumers who have been struck out by soaring costs in recent months may want to consider applying for a debt consolidation loan in order to spread repayments over a longer period. Meanwhile, an unsecured personal loan could be recommended for those who are currently struggling to get on to the property ladder. In the wake of the financial crisis, the CML has warned that there will be a shortage of loans for house purchase for some time to come.

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