More than 750,000 families are at risk of defaulting on their mortgage

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13,200 properties were repossessed in England and Wales at the height of the financial crisis in the three months to March 2009, with 48,900 properties seized by the courts overall that year.

House prices fell for the fourth consecutive month in December last year to £281,272, according to Halifax, down more than 4% from their August peak.

The Balance Sheet Office believes rates will fall 9% between the fourth quarter of 2022 and the end of 2024, driven by skyrocketing mortgage rates and the economic downturn.

It fell by more than 20% during the financial crisis.

Rathi warned earlier that young borrowers under the age of 30 are “particularly at risk” of default. These first-time buyers “often went out of their way to buy a property,” he said, adding, “They may have taken out a fixed-rate mortgage at 2pc or 2.5pc. When that ends, they may look for a materially higher rate. 5pc or more.”

The FCA has also warned that borrowers who used the Help to Buy system, which allowed first-time buyers to acquire a property with just a 5% deposit, may be more likely to default because they also start paying interest on the interest-free component of their purchase. , as well as forcing them to pay thousands of pounds every year as they switch deals. “This is a part of the market that we’ll need to watch really closely.”

The Resolution Foundation, a think-tank, has warned that falling home prices will leave nearly 140,000 young adults living in a property worth less than their mortgage.

An estimated 1.4 million homeowners will have to remortgage this year, according to the Office for National Statistics.

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