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The number of homes being repossessed tumbled by 10 per cent in the last three months.
About 11,400 homeowners lost their properties between April and June, down from 12,700 in the first three months of the year, according to the Council of Mortgage Lenders.
The figures gave hope of a recovery in the housing market and added to the growing number of signs suggesting the economy is recovering.
Lenders cut their estimate for repossessions this year by 10,000, predicting that 65,000 Britons will lose their properties this year. The CML said a raft of factors had helped people who were struggling with mortgage repayments, including low interest rates, more help from lenders and a number of government schemes.
These include the Mortgage Rescue Scheme, which lets homeowners sell part or all of their property to a social landlord and rent it back, and the Homeowner Mortgage Support scheme, which allows people to defer paying interest on up to 70 per cent of mortgages for up to two years.
New rules also mean that courts can only force families to leave their homes if all alternative measures have failed. CML head of policy Jackie Bennett said lenders were helping homeowners who are showing commitment and "paying what they can, when they can".
They are also being helped by record low interest rates, now at just 0.5 per cent, down from five per cent at the beginning of October last year.
But repossessions are still 14 per cent higher than last year, and more than 200,000 people fell behind with repayments between April and June, up 2.5 per cent on the start of the year.
Experts voiced fears that rising unemployment could trample on signs of recovery.
Reader views (3)
"Repossessions outlook better than predicted"
Yep - instead of horrendous, they are merely awful!
Selling an idea is much like selling a product. Encourge others to think things are even worse than they are, then when the reports come out not quite as bad - "things are getting better". A good salesman will start with a high price and let himself get beaten back to the price he wants in the first place.
- Rogan, Irving, 15/08/2009 00:03
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The fact that repossessions are still taking place is surely a good indicator that recovery is still not taking place. Look at the situation again when repossessions drop to zero and house-purchase is on the rise again.
- Graham Rodhouse, Helmond, Netherlands, 14/08/2009 12:39
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Maybe Gormless Brown was right all along.
- Peace Maker, Battersea, 14/08/2009 12:16
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