The Government has stepped in to protect homeowners who are struggling to make mortgage repayments after fears that some lenders were too eager to repossess properties.

On Wednesday Gordon Brown said that lenders will need to prove that every other alternative has been explored before a repossession is granted by the courts.

At the start of the summer more than 150,000 homeowners were at least three months in arrears. The number of repossessions is predicted to double this year to 45,000 and to keep climbing next year, according to the Council of Mortgage Lenders.

However, the evidence so far suggests that some lenders would rather repossess than negotiate. Last week Northern Rock was accused by housing charities of acting “aggressively” towards borrowers in arrears.

Gill Hankey, of the Bankruptcy Advisory Service, says: “In the real world, lenders are still being as aggressive as ever towards borrowers who are unable to make repayments.”

If you have slipped into arrears, you will not necessarily lose your home. There are steps that you can take to stay in your property and clear your debt.

Contact your lender

If your circumstances change, such as losing your job, contact your lender immediately. It might be willing to offer a repayment holiday of two or three months, which will give you the breathing space to make alternative financial arrangements.

Under the new rules announced this week, lenders should be more willing to lower your monthly costs temporarily or to increase the length of the loan term, which would also shrink the monthly payment.

Another possibility is to switch to interest-only payments. Mortgage payments on a £150,000 loan with an interest rate of 6 per cent would fall by £217 a month by switching from repayment to interest-only.

Work out a budget

Debt charities, such as the Consumer Credit Counselling Service (CCCS) or the National Debtline, can help with a budget plan to use when renegotiating the terms of your mortgage.

GE Money, the American lender, refers borrowers to the CCCS as soon as there is evidence that they are struggling to make repayments and the charity is talking to other lenders to set up similar arrangements.

Francis Walker, of the CCCS, suggests that it can be better to seek help from a debt adviser before approaching your lender with a proposal. She explains: “We often find that borrowers set up an agreement with a lender and then find that it is unaffordable. Customers are likely to say what they think is acceptable to the lender rather than what they can afford.”

Prioritise your debts

The most important thing is to stay in your home, so your mortgage repayments should be paid before other unsecured debt, including personal loans or credit cards.

If you need to stop paying these debts temporarily, write to the loan or credit card company and explain your financial situation. It may be willing to suspend repayments if you can prove that you will be able to start repaying the loan again in the future. You should also cut out unneccessary expenses, such as satellite TV subscriptions or club memberships.

There are also practical ways to raise your income. Mr Tapp points out that a recent client realised that she could make up the shortfall in her repayments by renting out a spare room to lodgers.

Do not be bullied by your bank

If you have missed one or two mortgage payments, it is likely that your lender will have been in touch to talk about your financial situation. Lenders can apply pressure on borrowers to pay arrears quickly - and the failure to do so has been used as grounds for repossession.

However, Beccy Boden Wilks, of National Debtline, says that you will not be evicted if you can demonstrate that you can afford to make monthly repayments and a small amount of the arrears each month. She adds: “Your lender might push you to clear arrears in 12 months, but ask if you can spread the cost over the term of your loan.”

You could also ask about adding missed payments to the loan, which is known as capitalising your arrears.

Be wary of sale-and-leaseback

Speak to a debt charity or financial adviser before considering sale-and-leaseback schemes, which are unregulated. This would involve the sale of your property to a company that would then keep you on as a tenant.

You could also contact your lender or local housing association about mortgage rescue plans, which work in a similar way to sale-and-leaseback.

Attend all hearings

If you do miss a number of monthly repayments, it is likely that your lender will write to you with a date for a repossession hearing.

It is crucial that you attend, says Ms Boden Wilks, because if you can demonstrate to the district judge that you are able to make your basic repayments, the judge will support your case.

However, if there is no way that you will be able to afford your monthly repayments, request that you are given time to sell the property yourself.

National Debtline: 0808 8084000, www.nationaldebtline.co.uk;

Citizens Advice: www.citizensadvice.org.uk; CCCS: 0800 1381111.

Case Study: Halifax refused to bend over mortgage arrears

Paul Hind, of North Frodingham, East Yorkshire, had his four-bedroom family home repossessed by Halifax last month. He is now living with his wife, Elizabeth, and two sons in a two-bedroom holiday cottage.

Mr Hind, 50, got into trouble with his mortgage payments last year. His finances came unstuck after he bought a troubled business and was eventually forced to declare himself bankrupt.

Early this year Mr Hind decided to contact the Bankruptcy Advisory Service (BAS) for help. He then went into a Halifax branch to talk about setting up a new repayment plan but was told that he would need to clear his arrears first.

He says: “Since then I tried to communicate with Halifax through the BAS but it wasn't interested and did not respond to my letters.”

The bank took possession of the property last month and has now put it back on the market. However, though Mr Hind had the property valued at nearly £400,000 three months ago, it is now on sale for only £260,000.

Little hope with negative equity

There are growing fears that negative equity could eventually exceed the levels seen in the early 1990s.

Standard & Poor's, the ratings agency, estimates that two million homeowners could owe more in mortgage debt than the value of their property by 2010.

In 1995, when negative equity was last at its peak, about one million homeowners found themselves in this situation. The agency says that tumbling house prices are pushing more than 60,000 homeowners into negative equity every month.

However, Ray Boulger, of John Charcol, the mortgage broker, says that there are questions surrounding the headline-grabbing figures, adding: “Clearly, negative equity will increase until house prices stabilise. But there will be huge variations in the drop in house prices.

“Of course, if you happen to be one of those affected, it is horrible, but we need to keep this in proportion - negative equity is only really a problem if a homeowner needs to move, sell up or remortgage.”

In the past two months banks and building societies have been dumping competitive rates and restricting lending. Most now offer attractive rates only to borrowers with a deposit of at least 15 per cent, or an equivalent level of equity in their home. As a result, homeowners coming to the end of fixed-rate deals could find that the falling value of their homes restricts their options for moving to another low rate.

If a mortgage represents more than 90 per cent of a property's value, borrowers could be forced to move on to their lenders' standard variable rates, adding hundreds of pounds to their monthly payments.

Mr Boulger says: “Most borrowers would have assumed that they would be able to get another low fixed rate at the end of their two, three or five-year loans. However, many people will not have enough equity in their homes to secure a new deal. Even borrowers who have 10 per cent equity in their homes will find it increasingly difficult to remortgage.”

However, Mr Boulger adds: “As long as homeowners can afford their mortgage repayments there is no way that the lender will be looking to repossess their homes.”

Last month house prices fell by 12.4 per cent compared with the same month last year, according to Halifax, the UK's largest mortgage lender.