British homeowners are becoming increasingly worried about the risk of repossession as the housing market in the UK continues to decline.

Such is the suggestion of Equifax, which has released a survey showing that as many as one in five people are worried about having their home reclaimed as a result of their inability to meet monthly mortgage repayments. According to the online credit information provider, an additional 38 per cent of homeowners said they would be prepared to voluntarily give up their home if such a repossession order was issued against their property.

Neil Munroe, external affairs director at the group, said that this figure was particularly unsettling and advised consumers to be aware that giving up their home should only be considered as a last resort. He added that secured loan and mortgage providers have a responsibility to protect homeowners against the risk of having their home repossessed and urged those who are struggling with debt to seek guidance on the most effective course of action to take.

The group also identified a number of other trends demonstrating the levels of financial strain that consumers are coming under in today’s stagnating economic environment. It noted that with many first-time buyers struggling to break into the housing market, about one-third of people said they would opt for a mortgage worth up to five times their own income in order to secure a new property or move to a bigger home.

However, despite ambitions to get on to the housing ladder, Equifax warned that committing to such a large loan could land people in hot water. Citing recent figures from the Council of Mortgage Lenders, the firm noted that more than 23,200 consumers who took out 100 per cent mortgages in the year to the end of March 2008 could soon face negative equity.

“A staggering 80 per cent of those surveyed think there isn’t enough access to housing people can afford,” Mr Munroe added.

“This probably explains why people are prepared to stretch themselves to the limit, just to get on the property ladder. However, this can lead to major financial difficulties further down the line. Although the numbers of mortgage arrears are still low, the lack of transactions in the property market will eventually filter down to the high street, as well as professions such as builders and plumbers, putting further strain on the economy.”

For those who are concerned they are at risk of repossession as costs of living soar, taking out a debt consolidation loan may prove an effective way to manage costs and minimise risk in a worsening economic environment. By entering into lowered monthly payment arrangements with creditors that spread debt commitments over a longer period of time, people may find they are able to keep their head above water more effectively and make sure all obligations are met while still having enough money to spare to afford everyday living expenses.

For those looking for other ways to control spending, MoneyExpert advised consumers to consider taking a mortgage payment break in an effort to get their finances back on track. In April, the group reported that 58 per cent of fixed-rate and discounted mortgage deals offered this option.

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