The significant increase in mortgage arrears is expected to worsen in 2009, lenders have been warned.

According to the Council of Mortgage Lenders (CML), half a million homeowners will be expected to fall back on their mortgage payments after predictions that the downturn of the UK economy will continue to fall further through 2009.

The CML stated that 500,000 homeowners will be behind on their repayments by over three months resulting as over double of this year’s forecast figure of 210,00.

According to the CML, 2009 will be a “very tough year” for the mortgage market as the economy is expected to fall further. Unemployment figures are expected to increase leading to approximately 75,000 home repossessions.

The CML said: "The economic recession means unemployment is rising sharply, and this will inevitably impact on the number of households facing mortgage arrears."

Lending is also expected to tighten as more lenders will be reluctant to lend. According to economists, net lending will drop to minus £25bn in 2009, compared to approximately £40bn this year and £108bn in 2007.

David Page, of Investec Securities, said: "If net lending does prove to be as low as that, we really would be looking at a severe downturn.

The pace of house price declines this year could also be repeated."