According to housing charity Shelter, secondary loans taken out by homeowners are adding to the growing number of repossessions in the UK.

Secondary loans were taken out by thousands of homeowners in the UK when house prices were on the rise. In the housing boom, with equity building in their properties, many Brits took out second loans on their houses to pay for things like home improvements or even to pay off credit card debt.

But according to Shelter at least 20% of the repossession orders currently being issued by County Courts involve secondary loans.

The charity is forecasting that repossessions will rise to around 53,000 this year, well above industry estimates and approaching the record levels seen in 1993, when 59,000 homes were repossessed.

According to Shelter’s research, some companies providing secondary loans will proceed to repossession when a borrower defaults on even a relatively small payment.

This tendency, combined with falling house prices, leaves some homeowners extremely vulnerable and less likely to contest applications for repossession orders.

The charity also points out that a continued slide in house prices will compound the situation because it could push large numbers of people into negative equity.