The number of homes repossessed is expected to rise after this year, ministers were told yesterday.

The number of homes repossessed is expected to rise after this year, ministers were told yesterday.

Bob Pannell, head of research at the Council of Mortgage Lenders, said that, despite rising unemployment, the group still expected the number of homes repossessed during 2008 to be 45,000.

But, appearing before the Treasury Select Committee, he admitted that going beyond 2008 there was likely to be "further upward pressure" on repossessions.

Fionnula Earley, Nationwide's chief economist, stressed that repossession levels remain low by historical standards.

She added that the increase was generally confined to specialist areas of the market, where borrowers were likely to have been more stretched.

Mr Pannell also played down the impact of higher mortgage costs as people come to the end of fixed-rate deals taken out two to three years ago.

He said new rates were only around 1% or slightly higher, and the situation was not as dramatic as some people had presented it as being.

Also appearing before the committee, Professor John Muellbauer, of Nuffield College, said house prices would need to fall by 25% from their peak in mid-2007 to have a big impact in bringing first-time buyers back into the market.

He added that he thought we were about halfway through the house price correction.

Mr Pannell said the bank measures introduced over the last week would "not necessarily themselves kick-start or stabilise the housing market".

"We may need specific measures targeted at the housing market," he said.

He added that he still looked forward to the recommendations of the Crosby Report on the mortgage market, which should be made public shortly after being delayed in the face of the recent financial turmoil.

When asked whether other building societies felt resentment after being left out of recent measures to help lenders, he said: "The sheer practicality of needing to act quickly" has meant "common sense said choose the core banks and building societies in the country".

He added: "I think the reality is that a number of the eight have significant wholesale funding obligations."