More than 750,000 households are at risk of bankruptcy

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At the height of the financial crisis in the three months to March 2009, a peak of 13,200 properties were repossessed in England and Wales, with a total of 48,900 properties being repossessed by the courts in that year.

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

The OBR expects prices to fall by 9 percent between the fourth quarter of 2022 and the end of 2024, due to significantly higher mortgage rates and the economic downturn.

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During the financial crisis, they fell by more than 20 percent.

Mr Rathi previously warned that young borrowers under the age of 30 were at “particular risk” of defaulting. These first-time buyers had “many times made an effort to buy a home,” he said, adding: “They may have a fixed rate mortgage of 2% or 2.5%. When that matures, they may be looking at a significantly higher interest rate of 5 pieces or more.”

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The FCA has also warned that borrowers who have taken advantage of the Help to Buy scheme, which has allowed first-time buyers to get a home with a down payment of just 5 percent, are at greater risk of default as they also start paying interest on the interest-free part. of their purchase, as well as being forced to spend thousands of pounds more every year when they switch deals. “That’s part of the market that we really need to keep a close eye on.”

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The Resolution Foundation think tank warned that a fall in house prices will mean that nearly 140,000 young people will live in a home that is worth less than their mortgage.

An estimated 1.4 million homeowners will need to re-mortgage this year, according to the Office for National Statistics.