Thousands more homeowners with sub prime mortgages across the UK are at risk of losing their home in the next six months, new figures today reveal.

A poll, carried out for housing charity Shelter, shows more than 22 per cent of respondents, around 160,000 households, admit to struggling or falling behind with their monthly mortgage payments, with five per cent, around 37,000, expecting to be repossessed in the next six months.

The poll, by YouGov, which looks for the first time at the crisis unfolding in the sector, paints a bleak picture of sub-prime borrowers who are taking drastic measures to pay their mortgage, including borrowing from friends and family, using credit cards and taking out loans.

Worryingly, more than 36 per cent of respondents, around 260,000 households, say they would be unable to fully meet mortgage payments if their income dropped significantly. Of those already in arrears the reasons given include reduced working hours, increasing costs and trying to manage their debt.

Gavin Corbett, Head of Policy, Shelter Scotland, described the figures as 'terrifying', adding that while they were UK-wide, there was a worry that similar problems would face Scots with sub prime mortgages.

He added: 'Homeowners who borrowed in good faith during the boom now find themselves among the most vulnerable to repossession. Now for the first time we can reveal the true extent of the credit crunch and the destruction sub prime is having on the housing market.'

But Shelter believes the situation will get far worse with thousands of sub prime borrowers looking for new deals when their fixed rate ends later this year. With sub prime standard variable rates at 10.5 per cent and fixed rates of 9.5 per cent, thousands could be hit with a huge monthly payment shock. There are also only five sub prime lenders in the market compared to 22, a year ago.

Mr Corbett added: 'With sub prime mortgages drying up and mainstream lenders only looking at buyers with huge deposits, homeowners with sub prime mortgages now have nowhere to go. These homeowners were desperate to get onto the housing ladder, now they're stuck out on a limb with many facing unaffordable mortgages, negative equity and rising debt.'

Shelter is calling for the Government, lenders and the FSA to work together to provide a package of real help to struggling sub-prime borrowers who have been caught out by the credit crunch, with borrowers being treated fairly by lenders.

Mr Corbett added: 'Both Scottish and the UK Government have been active recently in coming forward with new proposals to help mainstream borrowers in arrears and to help increase lending in the high street banks.  But with mainstream lenders only looking to help borrowers with good credit records and significant deposits, homeowners with sub prime mortgages now have nowhere to go when they are in difficulties.

 'The various lender and government initiatives are a welcome first step but real attention needs to be paid to the needs of sub-prime borrowers if we are to avoid the repossessions crisis spiralling out of control.'

For more information contact Christina Cran, Shelter Scotland media office, 0844 515 2442 (connects to out of hours).

Notes to editors

1. Shelter's survey was conducted online with 1,212 sub-prime borrowers from across the UK between 30th Jan 2009 to 03rd Feb 2009 by YouGov’s Financial Services Group.  The figures are unweighted.  The borrowers in the survey have been defined as sub-prime if their lender was felt to be primarily operating in the sub-prime market or because they said, in a previous survey, that they had a credit repair mortgage.
2. In 2008 there were 10.6 million mortgages in UK (excluding buy to let) (CML), Industry estimates suggest that the broadly defined sub-prime market accounts for around 7% of the UK mortgage market. Therefore we estimate that there are around 742,000 sub-prime mortgage borrower households in the UK.  Estimates stated have been rounded to the nearest thousand.
3. There is no agreed definition of the sub-prime sector. Shelter commissioned YouGov to create a sample of sub-prime mortgage holders to carry out this survey. Respondents have been defined as sub-prime if their lender was felt to be primarily operating in the sub-prime market or because they said, in a previous survey, that they had a credit repair mortgage.
4. Credit repair mortgages are sub-prime mortgages where borrowers aim to maintain regular repayments over a period of time (usually at least 3 years) to enable a move to a cheaper 'standard' mortgage.
5. The number of subprime lenders and subprime interest rates were sourced from www.moneyfacts.com.