House repossessions are set to rise by more than a third because homeowners are struggling to cope with higher interest rates.

The warning comes from the the Council of Mortgage Lenders (CML) after figures showed that the number of court orders authorising lenders to seize people’s homes had surged.

Court orders for repossessions hit 14,048 in the first quarter, a rise of almost 25 per cent from the same period in 2004, and the sharpest increase since Labour came to power in 1997.

The Department for Constitutional Affairs has also announced that court actions begun by banks and building societies seeking repossession also jumped, reaching 25,869 for the quarter.

Meanwhile, Countrywide - the largest estate agency chain in the UK - announced on Wednesday that housing transactions in the first three months of the year were 25-30 per cent below the same period in 2004.