Lenders on Tuesday told Alistair Darling that they could not throw an immediate lifeline to beleaguered mortgage holders by passing on cuts in the base rate – and warned that repossessions could rise in the coming months.

The comments came when Mr Darling, the chancellor, met the Council of Mortgage Lenders and the Finance and Leasing Association to discuss ways of bringing down the cost of home loans, which has risen steeply as a result of the credit crunch.