The London Daily News

Property News Desk

Home owners are being warned that repossessions are soaring with a 15 per cent jump in the first quarter of 2011, according to the Council of Mortgage Lenders.

9.100 were repossessed by banks this year, compared with 7.900 in the same time in 2010.

The coalition Government is being warned by groups like Shelter that higher VAT, living costs and "stagnant wages" are all combining to prove a lethal combination to home owners struggling to keep up payments on their homes.

Interest rate rises will lead to it is feared millions of home owners potentially could see their home repossessed with inflation still rising forcing the Bank of England to increase interest rates.

Shelter has said that 78 per cent of home owners are struggling to pay their mortgage each month, with 167,000 people in arrears on their mortgage, an estimated 40,000 are expected to see their home repossessed this year.