Financial watchdogs and regulators have expressed concerns that some homeowners and borrowers are not preparing themselves for the worsening economic conditions. For homeowners who don’t have contingency savings, they could find themselves with no choice but to opt to sell property fast or face house repossession risks.

The Financial Service Authority believes some homeowners have become dependent on debt – relying on easy and cheap credit to bail them out - and believing rising house prices allows them to sustain their levels of spending. Some homeowners are falling deeper into debt and spending more than they earn, without savings, pension plans or contingency funds. It’s believed as a result those who can’t sell property fast or don’t face up to the reality that they need to sell property fast, could be unable to stop house repossession.

The term the FSA used was “significant minority” when it described the households who are putting themselves at increased risk. It’s predicted that the number of house repossessions will rise sharply and the quick house sale market will come under increased strain. Finances are already tight for many UK homeowners, especially the ones who bought homes in the past two or three years when house prices were over inflated – they may end up having to opt to sell property fast and face up to the grim reality that they actually lost money on their property investment.

Those most at risk according to the FSA’s head of financial strategy and risk, Lyndon Nelson, told the press: “It is not necessarily the affordability of the mortgage. It is their other debt. Customers with other borrowing in addition to the mortgage are struggling…The other borrowings tip them over the edge,” he warned. The quick house sale market could in fact be overwhelmed as more homeowners struggling to stay afloat wake up and face up to the reality of the property slump.