According to the Council of Mortgage Lenders, in the first six months of the year possession cases totalled 15,700, the lowest number since the second half of 2007 with 13,100 cases.

Arrears also dropped in the second quarter to 157,700, or 1.4% of all loans registered late payments totalling 2.5% or more of the balance, the lowest number since Q3 2008.

Within the total number of mortgages in arrears at the end of June, 80,800 had arrears of more than 2.5% but less than 5% of the balance, 31,600 were in the range of 5-7.5% of the balance, 15,000 at between 7.5-10% of the balance, and 30,300 with arrears of 10% or more of the balance, said the CML.

The CML’s latest 2013 forecast is that there will be 35,000 cases of possession during the year, with 160,000 mortgages ending the year in arrears of more than 2.5% of the balance. At this stage, the CML has no imminent plans to revise the forecast.

CML head of policy Jackie Bennett said: “Yesterday’s message from the Bank of England provides some encouragement to those borrowers who are struggling that any rise from the current historically low Bank rate will be linked to an improvement in the wider economy. As ever, the key message for those borrowers is that they should talk to their lender as soon as possible if they believe they are in danger of missing a mortgage payment.”