Latest figures: Council of Mortgage Lenders

According to the latest survey data from the Council of Mortgage Lenders (CML), the figure was virtually unchanged from 9,100 in the second quarter

So far this year, a total of 27,500 properties have been taken into possession – 4% fewer than in the same period last year. The CML says it now appears likely that the total number of repossessions in 2011 will be lower than its forecast of 40,000.

There was a slight fall in the number of households in arrears with their mortgage across all categories. At the end of September, the total number of mortgages with arrears of 2.5% or more of the outstanding balance fell to 161,600 (1.44% of all loans), down 2% from 165,200 (1.47% of all loans) and 8% lower than the 175,100 cases (1.55% of all loans) at the end of September 2010.

The trade body says despite these improvements there is still a stock of cases with significant arrears with 27,300 loans having arrears of more than 10% of the outstanding balance.

As well as this, the squeeze on household budgets as a result of falling real incomes, cost of living rises and increasing unemployment will negatively affect households, and could lead to increased arrears in the coming quarters, the CML says.

Paul Smee, director general of the CML, said: “The fall in the number of mortgages in arrears, and the stable picture on repossessions, are testament not only to the beneficial effects of low interest rates, but also to effective arrears management, and good communication between lenders, borrowers and debt counselling organisations.

“Against the backdrop of widespread financial uncertainty sweeping both the UK and the wider European economies, it is impossible to be sanguine about the future influences that households may face. But lenders will do their utmost to help borrowers keep their homes, whatever pressures emerge. Anyone worried about their mortgage should seek early advice and talk to their lender. These figures firmly show that repossession does not have to be an inevitable consequence of mortgage arrears.”