Shelter, the housing charity, said that the number of repossessions could be a fifth higher  than current figures suggest because of actions taken by “second charge” lenders.

Tens of thousands of people have taken out a “second charge” home loan on their property  and are liable to repossession if they fall behind on payments. The second charge market is  worth more than £11 billion. Council of Mortgage Lenders (CML) repossession data do not  include any actions taken by second charge lenders.

The CML said that there were 27,100 repossessions last year, but Shelter said the figure  could be closer to 32,000, once second-charge actions were taken into account. While the  CML said that repossessions would increase by 50 per cent to 45,000 this year, Shelter said  that the increase could be much greater, forecasting that an additional 9,000 borrowers  will lose their homes at the hands of second-charge lenders.

The Financial Services Authority will today publish the number of repossessions by all  regulated lenders. While these figures are expected to be higher than the CML figures, they  are unlikely to show the extent of the problem because many second-charge lenders are not  regulated by the watchdog and will not be included in the data.

Caroline Davey, deputy director of policy and research at Shelter, said: “We are seeing  increasing numbers of vulnerable homeowners being repossessed on the basis of loans of as  little as a few thousand pounds.”

Chris Tapp, of Credit Action, the debt charity, said: “About half the people we help who  are in arrears have a second charge loan on their property.”

The Finance and Leasing Association, which represents 75 per cent of second-charge lenders,  said its members did repossess hundreds of homes last year, but on a more modest scale than  that suggested by Shelter. It said its members repossessed nearly 800 properties that were  not included in the CML's figures.

The association added that, at the end of last year, about 40,000 second-charge mortgage  accounts were in arrears by two months or more, compared with 129,800 first- charge  mortgage accounts in arrears by three months or more reported by the CML.