The number of repossessed homes being sold at auction has doubled since last year, a leading auctioneer said yesterday.

Allsop, the UK’s biggest property auction house, said that nearly 40 per cent of the properties going under the hammer at auction next month were repossessed by banks or building societies. Last February, just 20 per cent of properties auctioned were repossessed.

Gary Murphy, a partner at Allsop, said: “The number of repossessions we deal with leapt after last summer. Between 45 per cent and 50 per cent of properties in our last three sales were repossessions.”

The average sale price of properties auctioned by Allsop at the last auction in December was £200,000.

Mr Murphy said that property investors were struggling with spiralling mortgage costs after five base rate rises and only one rate cut in the last 18 months. “The rise in repossessions is down to the fact that borrowers are having difficulties repaying their loans and a large proportion of these are buy-to-let investors who failed to appreciate the pitfalls of property investment,” he said.

There are fears that repossessions will soar this year as lenders, especially sub-prime lenders, tighten their lending criteria. Some sub-prime lenders are now refusing to lend more than 75 per cent of the value of a property.

Homeowners who could only raise a small deposit when they bought their home and who cannot lay their hands on a sizeable lump sum to make up the difference when their mortgage deal comes to an end, run the risk of losing their home.

The Council of Mortgage Lenders (CML) has predicted that the number of home being repossessed will rise by 50 per cent this year to 45,000.

Steart Lilly, president of the National Association of Estate Agents (NAEA), said: “Sadly, over the last couple of years, some financial organisations have been keen to lend money where perhaps they shouldn’t have done.”