The figures were boosted by low interest rates, greater lender tolerance and support from the government and debt advice charities.
The CML warned the 40% cut in mortgage interest payments on 1 October and continuing economic uncertainties make support for struggling borrowers more important.
Data showed 8,900 properties, or 0.08% of all property in the UK were repossessed in the third quarter of 2010. This is 5% lower than the 9,400 cases of possession in Q2 this year and 27% lower than the 12,200 repossessed a year ago.
In the first nine months of the year, there were 28,400 cases of possession, trending below the CML’s revised forecast of 39,000 for 2010. This is significantly lower than its first forecast of 53,000 properties.
The number of mortgage arrears has also fallen. CML data showed that 176,100 mortgages had arrears of 2.5% or more of the outstanding balance at the end of September. This is in contrast to 178,200 at the end of June and 203,800 a year earlier.
This is consistent with the CML’s prediction of 175,000 mortgages in arrears at the end of the year but lower than its original forecast of 205,000 cases.
CML director general Michael Coogan, said: “We cannot take falling arrears and possessions for granted and the recent welcome trend may reverse.”
Borrowers react in different ways to a reduction in income or higher borrowing costs when interest rates rise, said Coogan.
Many households make swift budget adjustments, prioritising bills to manage their way successfully through periods of temporary difficulty, he said, adding others may not be in a position to do so.
“We cannot afford to lose our focus on the long road towards recovery from here, which is why the CML proposes further work with the government and debt advice agencies to enhance support for borrowers in difficulty.”
