Home repossession orders are nearing the level last seen in the recession of the early 1990s after rising by 16 per cent in the first quarter of this year.

According to the Ministry of Justice, 38,688 mortgage possession claims were issued from January to March this year, compared with 33,715 for the first quarter of 2007.

The last time mortgage repossession claims reached this level was in the third quarter of 1990, when actions hit 37,498, and the housing market was slipping into one of the worse downturns in its history.

At the peak of the downturn in 1991, home repossession orders hit 186,649 for the year, reaching a quarterly high of 51,037 from July to September. The actual number of houses taken back into possession by lenders climbed to a record 75,500 in 1991, according to the Council of Mortgage Lenders (CML).

The Ministry of Justice also revealed today that repossession orders issued by landlords climbed by 4 per cent to 37,221 from January to March compared to the first quarter of 2007.

The rising number of repossession claims emerged as the Government promised to implement measures intended to stop people from losing their homes, including providing an extra £9 million over three years to fund debt advice and legal support for families.

Howard Archer, chief UK and European economist at Global Insight, said: "Unfortunately the situation seems set to deteriorate significantly further. The financial pressure on many home owners is increasing, and it seems certain that repossessions will trend up appreciably over the coming months, particularly if the economy suffers an extended marked slowdown and unemployment starts rising, which seems likely."

Yesterday the Building Societies Association gave warning that the mortgage market would not improve for two years, as the Bank of England opted to leave the interest rate unchanged at 5 per cent.

Last month, the growth in house prices stalled for the first time since February 1996. UK house prices are 0.9 per cent lower than in April last year, according to Halifax.

Today, Alliance & Leicester becomes the latest lender to charge higher rates to mortgage customers with smaller deposits. It has also repriced its mortgage range, increasing rates by between 0.2 per cent and 0.9 per cent.

The Government is scrambling to throw struggling homeowners a lifeline. Ministers yesterday performed a U-turn on Home Information Packs (Hips), the troubled scheme requiring home-sellers to compile a report on their property. The full introduction of Hips will now be delayed from June until the end of the year. Hips were criticised for being too expensive.

Alistair Darling also held talks yesterday with the chief executives of the six biggest UK banks, including RBS and HBOS, to urge them to do everything they can to prevent borrowers from losing their homes.

The Government will also look at the Mortgage Interest Scheme, which helps borrowers in arrears, but will make no guarantee of reforms. The CML has criticised the scheme for being too slow and offering inadequate financial help.

Money Central: Are house prices heading for a 1990s-style crash?