The number of people who lost their home soared to a 14-year high during 2009, as the recession continued to take its toll, figures showed today.
Around 46,000 people had their property repossessed during the year, the highest level since 1995 and 15% more than in 2008, according to the Council of Mortgage Lenders.
But the figure was well down on the group's original forecast that 75,000 people would lose their home during the year, although this was revised down twice to 48,000 when the predicted flood of repossessions failed to materialise.
A further 188,300 homeowners were also in arrears of at least 2.5% of their outstanding mortgage debt at the end of last year, although this was 3% lower than during the third quarter.
A combination of low interest rates, increased lender forbearance and the introduction of Government schemes to help people who are struggling to keep up with their mortgage has helped to keep repossession figures lower than forecast.
But the CML warned that the economy was not "out of the woods" yet, and said 2010 was likely to be a challenging year for many homeowners.
It has previously predicted that 53,000 homes will be repossessed this year, with a further 205,000 people ending 2010 in arrears.
But it said today that these forecasts may be "a little pessimistic", due to unemployment not rising by as much as had been expected, and low interest rates.
Figures for the final quarter of last year showed a slowdown in repossessions to 10,200, 13% lower than during the previous three months.
CML director general Michael Coogan said: "We are not out of the woods yet - 2010 will still be a challenging year for many borrowers, and some households will inevitably find their finances being squeezed if and when interest rates do eventually rise."
The Ministry of Justice also released figures today showing a 35% drop in the number of repossession claims lodged with courts in England and Wales during 2009, the lowest level since 2004.
The claims led to 72,174 repossession orders being made during the year - also 35% down on the previous 12 months.
The drop was driven by the introduction of the Government's pre-action protocol in November 2008, under which courts can grant a repossession order only if all other measures to keep someone in their home have failed.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "The CML and Ministry of Justice data indicate that Government initiatives to reduce repossessions by requiring lenders and borrowers to examine all alternatives is having a significant beneficial impact in helping people to keep their homes.
"It also appears that many lenders are taking a more sympathetic view anyway. Nevertheless, there is the possibility that in a number of cases, the mortgage pre-action protocol is just delaying people losing their homes."
But the Conservatives criticised the Government schemes.
Shadow housing minister Grant Shapps said: "The Bank of England have kept many people in their homes by maintaining low interest rates but Government schemes haven't helped the rest.
"Forty-six thousand families have had to leave their homes, while the number of people approaching their local authorities in mortgage difficulties is increasing every quarter. Despite this, only 276 families were helped by Labour's £285 million Mortgage Rescue Scheme in 2009."
Meanwhile, Housing Minister John Healey angered radio listeners by saying that in some cases, repossession was the "best thing" for struggling homeowners.
Speaking to Victoria Derbyshire on BBC Radio 5 live, he said: "In some cases it is the best thing for people who are struggling their mortgage.
"Sometimes it's impossible for people to maintain the mortgage commitment they have got."