The threat of repossession will continue to hang over homeowners in arrears despite government plans to offer them more help. Mortgage experts said that Alistair Darling's proposals would not do enough to reduce the number of borrowers struggling with their repayments, 200,000 of whom are expected to be in arrears by Christmas.

The Chancellor extended a mortgage rescue scheme to include second-charge home loans on properties and set aside £15 million to provide more free debt advice. He also announced that big lenders had agreed not to repossess the homes of borrowers who are less than three months in arrears. However, Ray Boulger, of John Charcol, the mortgage broker, said: “Lenders already see repossession as a last resort and so this statement appears to simply state what current practice already is.”

Mr Darling failed to obtain agreement to the three-month moratorium from smaller sub-prime and buy-to-let lenders, leaving the most vulnerable borrowers still at risk of repossession within three months. For homeowners who lose their jobs the Chancellor opened up income support for mortgage interest, doubling the maximum loan limit from £100,000 to £200,000. From next year the support will be available three months after redundancy instead of the current nine. However, the Council of Mortgage Lenders said that the impact of this measure is still likely to be minimal because of restrictions on who is eligible to claim and called for these to be further opened up. The scheme currently covers interest rates only up to about 6 per cent.

Beneficiaries must be claiming income-based jobseeker's allowance and the support is paid only if no one else living in the household is working more than 24 hours a week. None of the above measures would have helped Zouhair Tourmoche, however. Despite trying to negotiate a payment plan with his lender, the 63-year-old self-employed garden designer from Cinderford, Gloucestershire, was evicted in July 2007 after five months of failing to keep up with his repayments when they rose from £660 to £900 a month.

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