The CML believes that the number of repossessions will rise to 45,000 next year, from 37,000 in 2011. That represents an increase of 22%.

This spike in repossession activity will be primarily driven by increasing levels of unemployment, and in turn decreasing household income levels.

Unsurprisingly given the continued economic turmoil, the CML has also cut both its forecast for property sales and mortgage lending in 2012.

The Council estimates that 825,000 homes will be sold next year, which is down from 850,000 in 2011.

Mortgage lending for 2012 was previously forecast to hit £150 billion, but the CML has now revised that prediction considerably to £133 billion, down from an estimated £138 billion this year.

There’s precious little in the way of good news for the housing market, as mortgages for first-time buyers continue to be a difficult proposition despite interest rates holding at very low levels.

Deposit funding remains the issue, and that’s a problem which could become worse next year despite the government’s planned mortgage indemnity scheme.

Chief economist at the CML, Bob Pannell, commented: “Despite the fact that activity levels have already been subdued for several years, we have pencilled in a broadly flat picture, for both mortgage lending and property transactions, at least until real incomes show signs of stabilising as inflationary pressures recede.”

Broadly flat being a rather positive way of putting ‘down by over 10%’ in the case of the cut mortgage lending estimates. And the chances of inflationary pressures receding next year are minimal, to say the least.

Repossessions, however, remain at lower levels than they realistically should be due to interest rates being held tight at next to nothing.

The last great housing crash at the end of the eighties saw considerably more repossessions being carried out, and this crash – complete with the global economic depression – is a much bigger affair.

Unfortunately the real trouble is likely to start when the government is finally forced to look at hiking interest rates, and those on trackers or unable to refinance to a new deal skate on increasingly thin ice.

According to Bob Lender at FinancialAdvisor.co.uk, “Despite the availability of mortgages, mortgage brokers continue to report weak demand, as the high price of property in the UK leaves many people unable to enter the property ladder.

The Intermediary Mortgage Lenders Association has accepted steps revealed in this week’s Spending budget to assist first-time purchasers – specifically the First Buy plan – however stated that this on it’s own may not be sufficient to make a huge effect.

Mr Williams, director at IMLA, stated: “The Government must see First Buy as one of a number of mechanisms to help the mortgage and housing market because it will have little impact in isolation.”