The number of homes being repossessed has fallen to its lowest level since records began in 2008, banks and building societies have reported.
Some 7,200 families sunk into such severe mortgage debt that they lost their home during the third quarter of this year, marking the lowest quarterly figure recorded by the Council of Mortgage Lenders (CML) and a 5.3% drop on the previous three months
The CML said that overall, there are likely to be fewer than 30,000 repossessions this year, which is 5,000 less than it had forecast at the start of the year and would put the annual number at its lowest level since 2007.
CML director general Paul Smee welcomed the figures, but also cautioned that it "makes sense" for home owners to think now about how they will cope with higher mortgage payments as and when interest rates rise.
The CML said that in the light of the better-than-expected figures, it also plans to revise down its previous prediction that there would be 37,000 repossessions for 2014 when its next housing market forecasts are published next month.
The number of borrowers who are behind with their mortgage payments also fell back to its lowest levels since summer 2008.
This latest quarterly arrears total shows that almost 10,000 fewer mortgages are in arrears compared with the same three-month period last year.
The number of households struggling with severe arrears of over 10% of the balance is also on a downward path, dropping by 600 on the previous quarter to 29,200, which is the lowest figure since winter 2012.
Ultra-low interest rates and Government schemes such as Funding for Lending and Help to Buy have helped to keep mortgage payments relatively affordable despite other pressures from soaring fuel bills and stagnating wages.
Recent figures released by the Bank of England showed that the typical interest rate taken out by borrowers on new mortgages in the second quarter of this year dropped to a new low of 3.47%.
But fresh concerns have been raised about how long borrowers will be able to continue benefiting from these low mortgage payments after a report by the Bank of England suggested that an earlier-than-expected rise in interest rates could be on the horizon.
CML director general Paul Smee said: "The continued reduction in payment difficulties is obviously very welcome.
"Anyone who does face the prospect of difficulty can be reassured that repossession really is a last resort. By talking to their lender as soon as possible, most can resolve their temporary problems, without the lender resorting to repossession.
"It also makes sense for people to think ahead now to how they will manage their finances to cope with higher interest rates, and higher mortgage payments, as and when rates rise in the future."
The Bank of England base rate has been kept frozen at its historic 0.5% low for more than four-and-a-half years and it has pledged not to raise the rate before unemployment falls to 7%.
While unemployment is not expected to fall to this key threshold before the end of 2016, the Bank's quarterly inflation report yesterday said the chances of this happening sooner have increased amid signs that the economic recovery has "finally" taken hold.
Many homeowners will have seen the value of their property increase in recent months as Government schemes have improved mortgage availability and injected fresh demand into the housing market from would-be home-buyers.
House prices reached an all-time high in August, according to Office for National Statistics figures. In London, prices are up by 9% year-on-year, although prices in Scotland, Wales and Northern Ireland are still well below the peaks seen in the property boom.
Arrears in the buy-to-let market are lower than in the home-owner market. While buy-to-let mortgages represent over 13% of the total number of mortgages in the UK, the sector accounts for a lower proportion of only 9% of the total number of mortgages in arrears.
But the repossession rate is a little higher on buy-to-let than on home-owner mortgages, reflecting lenders' efforts to keep people in financial trouble in their own home. Of the 7,200 total repossessions, 1,500 were buy-to-let.
Mr Smee said he will be "sorry" to see the Government's mortgage rescue scheme in the English regions close to applications at the end of next March.
He said: "While the 5,000 households helped directly through mortgage rescue may seem relatively small, the benefit to those households was huge."
Jonathan Harris, director of mortgage broker Anderson Harris, said: " While lenders continue to show forbearance to those in difficulty with their mortgage, borrowers must take some responsibility and contact their bank, ideally before they miss a payment.
"It may be that some compromise can be reached whereby the mortgage is switched to interest only, the term extended, or the borrower even takes a payment holiday, in order to keep them and their family in their home."
He said borrowers who believe they might struggle when interest rates eventually rise should consider locking into a longer-term fixed-rate mortgage.
Mr Harris said: "Although there is a premium to pay for a five-year fix compared with its two-year equivalent, it might be worth doing so to buy protection for a longer period of time."
Separate figures released by the Ministry of Justice (MoJ) showed there were 14,256 mortgage possession claims issued in courts in England and Wales in the third quarter of this year, slightly up from 12,882 in the previous quarter.
A possession claim is created when a claimant starts legal action for an order for the possession of a property.
The MoJ said the pattern of possession claims is very similar across England and Wales, with all regions seeing an increase between 2003 and 2008 and all having seen falls since then.
Housing Minister Kris Hopkins said the CML's figures are "encouraging news".
He said: " Our efforts to tackle the record deficit we inherited have helped keep interest rates down, mortgages more affordable and repossessions down.
"But I want anyone facing the real and frightening prospect of losing their home to know there's help out there.
"We've maintained the enhancements to support for mortgage interest and our £470 million funding ensures we continue to have a strong safety net against homelessness.
"So I would urge people with financial worries to speak to their lender early for information and advice, so they have the most options available to them and repossession can remain the last resort."
© 2013 Press Association