Ministers will promise up to £500 million today to help struggling homeowners to keep their homes, as official figures show that repossessions soared by 54 per cent to 40,000 last year.

The Government will disclose further details of a key scheme to try to stem the rising tide of repossessions as borrowers face an increasingly toxic combination of slumping house prices and rising unemployment.

Lenders still expect repossessions to mount up this year, however, with the Council of Mortgage Lenders forecasting that 75,000 people will lose their homes and that more than 500,000 homeowners will fall behind with their mortgage payments.

Ministers have been in intense negotiations with lenders over the Homeowners Mortgage Support scheme, which will allow borrowers with mortgages up to £400,000 to take a payment holiday if they have suffered an “income shock”, such as losing their job or having their hours cut.

It is expected to announce today that the scheme will allow borrowers to defer payments on up to 70 per cent of their mortgage interest for up to two years. The repayments of a borrower in the scheme with a £150,000 mortgage at 3.5 per cent interest would fall from £437.50 to £131.

The Government will also pledge to guarantee 80 per cent of the deferred payments if borrowers fail to cover their mortgage payments and subsequently lose their homes. If the repossessed property is sold at a loss, the lender will claw back money from the Treasury.

Experts warned that the scheme was not a free lunch for homeowners. David Hollingworth, of London & Country, the mortgage broker, said: “It will ease the pain for borrowers in the short term, but they will have to pay back the interest, plus added interest in the future.” months,” he said. “Even when conditions do improve, gross lending will be one of the later measures to recover.”

Separate data also revealed that the Government undershot its housebuilding target by 40 per cent last year as the number of housing starts fell to a near-30-year low in the final three months of the year.

Some 142,800 houses were built in England last year, down nearly 20 per cent from the previous 12 months and well below the Government’s target of building 240,000 new houses annually until 2016, figures from the Department for Communities and Local Government showed.

The number of houses being started between October and December plummeted to the lowest level since 1980. Building work started on 16,310 properties, down 27 per cent from the previous quarter and down 58 per cent from the final quarter of 2007. Shelter, the housing charity, said that it welcomed further clarification of the scheme, but “the sooner it gets up and running, the better. We urge lenders to sign up.”

It is understood that the first borrowers could benefit in April.

The scale of the slowdown in the housing market was underlined by figures from the Council of Mortgage Lenders showing that mortgage lending fell by 52 per cent to a record low in January.

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