AS the credit crunch continues to bite, fears over mortgage arrears and

A survey of more than 300 Citizens Advice Bureau offices found a 35 per cent rise in mortgage queries in January and February compared with 12 months ago.

The survey follows warnings from the Council of Mortgage Lenders that predicted a rise in repossessions in 2008, after a 21 per cent increase last year.

Although the Bank of England last week cut a quarter of a percent off the base rate, property owners across the UK are still living on a knife edge.

Trish Carpenter, of Southend Citizens Advice Bureau says many local people are struggling to meet sky-high mortgage repayments.

She said: "In the past, most of our enquiries centred around credit card and catalogue debt, but now many Essex homeowners are actually in difficulty with their mortgages.

"The credit crunch has come as a shock to many, hitting them hard.

"Previously, many mortgage problems would be caused by a change in circumstances, such as a relationship breakdown or redundancy, but these days more and more people are finding themselves in financial difficulty just coping with the everyday cost of living.

"Gas, electricity and petrol prices have all gone up and to make matters worse, the new council tax bills have recently been sent out."

So what can homeowners do to ease the pressure?

Trish stresses the importance of acting fast: "Many people in trouble leave it too late before seeking help. They bury their heads in the sand and just pray something will come along to solve the problem. By the time they come to us, some already have court hearing dates.

"As soon as you realise you have a problem, talk to your lender and explain the situation. If you don't, your lender will think you're just not paying."

Trish also advises taking a cold hard look at your finances: "Study your income and expenditure. Are there any areas you can cut back? Are you entitled to any benefits? Can you do more hours at work?

"Your mortgage has to be your priority."

For those yet to get on the property ladder, the outlook is bleak according to the Council of Mortgage Lenders. It warns mortgage funding could be cut by half in 2008 if no extra cash is forthcoming from the Bank of England. Its mortgage figures for the three months to February are the lowest for any quarter since 1992 during the depths of the last recession.

With mortgage cash in short supply, first time buyers, even if they've managed to scrape together a deposit, will find it very hard to obtain a mortgage.

Lenders have been withdrawing products dramatically in recent weeks. It is now impossible to get a 100 per cent mortgage and many brokers expect a 15 per cent deposit to become the norm quite soon.