The number and proportion of mortgages which ended in repossession was lower in 2013 than in any year since 2007 according to the Council of Mortgage Lenders (CML).

Only 28,900 mortgages ended in repossession, down from the 33,900 recorded in 2012, representing 0.26% of outstanding mortgages. Repossessions have fallen steadily from their peak in 2009 of 48,900 (0.43%), in the main due to low interest rates, relatively strong employment, and effective arrears management.

Paul Smee, CML director general, said: "Mortgage arrears and repossessions continue to fall, with low interest rates, relatively strong employment, and lender practices all combining to keep most people in their homes even if problems arise.

"Lenders recognise that temporary changes to circumstances can knock households off track - we only need to look at the experiences of those households affected by flooding right now to realise that life can contain unpleasant and unforeseen shocks.”

There has been a decline in the number of arrears cases across all categories, with the deepest arrears band of 10% or more of the mortgage balance seeing a fall for the first time since Q3 2010.

At the end of 2013 the number of mortgages that were in arrears to the value of at least 2.5% of the loan balance (that is, at least £2,500 arrears on a £100,000 loan) was 1.29%, compared to 1.40% of mortgages at the end of 2012, and a peak of 1.88% in Q2 2009.