Repossessions hit their highest level for 14 years to reach 46,000 in 2009, according to figures from the Council of Mortgage Lenders (CML).
Possessions had steadily declined from 49,400 in 1995 to just 8,200 in 2004 but in the last five years, possessions have increased substantially.
Although the total number of possessions in 2009 was significantly fewer than the 75,000 forecast at the start of the year, they were still 15% higher than the 40,000 recorded in 2008.
The CML admits its current 2010 forecast of 205,000 arrears cases and 53,000 properties taken into possession may be a little pessimistic, as unemployment is faring better than expected so far.
Michael Coogan, director general of the CML, says: "The fact mortgage arrears and possessions did not rise as much as we feared in 2009 is testament to the effect of low interest rate and a great deal of concerted effort by lenders, government and the advice sector to help borrowers to address financial difficulties when they occur."
He added 2010 will still be a challenging year for many borrowers, and some households will inevitably find their finances being squeezed if interest rates do rise.
The CML also says buy-to-let (BTL) lending slipped to an eight-year low in 2009. Gross buy-to-let lending was £8.5bn, down from £27.2bn in 2008.
It represented only 5.9% of all lending in 2009 despite new buy-to-let lending increasing for the second consecutive quarter in Q4 2009.
In Q4, there were 25,800 new BTL loans advanced in Q4, up from 23,700 in Q3 but down from the 38,000 advanced in Q4 2008. Gross BTL advances totalled £2.4bn in Q4, up £300m from Q3 but down £1.6bn from Q4 2008.
£1bn business since inception
Considered doing so in 2015
Client communication considerations
Aviva: ‘We are sorry’
FOI from Professional Adviser