The number of homes repossessed by lenders rose by 15% in 2009, to the highest level since 1995, figures showed today, but there were signs of improvement in the final quarter of the year.

The Council of Mortgage Lenders (CML) said a total of 46,000 properties had been taken into possession during the year, up from 40,000 in 2008.

However, the figure for the last three months of the year was down 13% on the third quarter, at 10,200, and 2% lower than the same period in 2008.

Despite rising unemployment and the continued credit squeeze, CML's figures are significantly lower than its original forecast of 75,000 for the year.

This is a result of record low interest rates that have allowed borrowers who might otherwise have been struggling to keep up with mortgage repayments, and a string of initiatives launched by the government to help people stay in their homes.

Alongside the mortgage rescue scheme, which allows homeowners to sell some or all of their home to a social landlord and rent it back, and the homeowner mortgage support scheme, which enables people to defer paying interest on up to 70% of their mortgage for up to two years, it also launched pre-action protocol, under which the courts can grant a repossession order only if all alternative measures to keep people in their homes failed.

It also urged lenders to exercise forebearance with struggling borrowers.

The CML's figures show that despite low interest rates, there was a 3% increase in the number of borrowers falling into arrears on their home loans over the year.

It said 188,300 mortgages ended the year with arrears equivalent to at least 2.5% of the outstanding mortgage balance. However, this was lower than the 195,000 the CML had anticipated, and 3% lower than at the end of the third quarter.

It also said low rates were helping those with a lower level of arrears to catch up with repayments, with the number of borrowers owing less than 5% of their mortgage falling over the quarter. In contrast those with higher levels of arrears were still struggling.