The number of homes repossessed after their owners fell into financial trouble has risen for the first time in seven years, new data showed yesterday.

There were 4,640 repossessions in the first half of 2005, up from 3,070 in the second half of last year, as rising interest rates and growing personal debt levels took their toll on householders.

According to the Council of Mortgage Lenders (CML), repossession levels were set to rise further but were still "extremely low" by historical standards.

CML deputy director general Peter Williams said: " Arrears and repossessions now look set to rise a little, but only to the sort of levels experienced in the past few years.

"A re-run of the early 1990s is certainly not on the cards."

The CML said rising interest rates were a main driver of the increase, while a build-up of personal debt was also causing problems for many financially-stretched households.

Ed Stansfield, property economist at Capital Economics, warned the data probably indicated the start of a new trend.

He said: "Today's figures show that for a small but growing minority of borrowers levels of debt have become a problem, despite historically low interest rates."