More people are likely to lose their homes because they have taken on bigger mortgages than they can afford, Bank of England Monetary Policy Committee member David Blanchflower warned today.

And he said he was concerned that it could result in "hardship" for some.

His comments came as a leading consumer research group suggested a third of British households could face serious problems paying back their mortgages.

As well as the 1.5 million, or nine per cent, considered sub-prime, Mintel reckons that a further four million, or 24 per cent, are seen by lenders as high-risk because the mortgagees are self-employed, do not have regular incomes, have frequently moved house or have fallen behind in paying household bills.

Mr Blanchflower made it clear he would like to see interest rate cuts now rather than next year.

Regarded as the main MPC 'dove', he has already pushed for a reduction, but been outvoted by colleagues who still fear inflation risks remain prominent.

Speaking to The Birmingham Post while on a visit to the West Midlands, Mr Blanchflower said the MPC had expressed concern for some time whether recent house price rises were sustainable.

And he highlighted people agreeing mortgages of up to seven times their earnings.

"Certainly there has been some evidence that people have been taking on mortgages they cannot afford," cautioned Mr Blanchflower.

"They have taken these on in the expectation that prices will rise."

However in recent months there has been considerable evidence that house prices are now slowing fast, and perhaps even declining in some areas.

Mr Blanchflower noted that as a result for some people risking big commitments would prove a "mistake".

And, cautioning that many on fixed mortgage deals now due out are set for much higher payments, he added: "I am concerned that there will be hardship ahead for some."

People would be impacted by the changing credit conditions - a reference to how lenders are now becoming more circumspect following the global credit crunch.

One of the fears pundits have highlighted is the effect on jobs.

Mr Blanchflower said the labour market was "relatively soft" and he perceived a "degree of slack".

There had been a tick up in unemployment since 2005 and the number of so-called inactive members of the workforce who don't figure in the statistics had risen.

"There is concern that as the economy slows unemployment will increase," he warned.

Mr Blanchflower is not entirely comfortable with his tag as the top MPC 'dove', claiming he is a hawk when it comes to keeping inflation on target. But he believes the economy is capable of operating at a higher activity level whereas others on the MPC would almost certainly take issue with that.

However he maintains that so far he has largely been proved right.

Projections in the BoE's November Inflation Report signalled borrowing costs would need to fall from the current six-year high of 5.75 per cent, perhaps in stages by up to 0.75 per cent.

"I think they should come down now so we get ahead of the curve," said Mr Blanchflower, insisting that was the only difference he had with others.

Asked how big a worry was the combination of the increased inflation poser from higher oil, food and commodity prices, together with the threat of economic slowdown following the US sub-prime mortgage crisis, the global credit crunch, and the Bank's own interest rate rises, he admitted the UK was facing "difficult times".

He said: "It is certainly a situation we have not had for quite a long time. It will be a delicate balancing act."

However, saying it was a benefit that inflation had been pulled back to 2.1 per cent - the target is two per cent - he said: "Obviously it is a concern but we are well-placed to deal with it."