Arrears and repossessions have seen a big jump in just three months
The number of properties repossessed by mortgage lenders rose by 12% to 11,300 in the third quarter of the year, the Council of Mortgage Lenders (CML) said.
The number of borrowers in arrears also went up compared with the previous quarter, by 8% to 168,000.
The number of repossession orders made by the courts in England and Wales rose by 3% to 29,516 in the same period.
The figures suggest that many more people are likely to lose their homes as the economy falls into recession.
"The government is taking action to protect the most vulnerable families from repossession," said the Housing Minister Margaret Beckett.
One woman with mortgage arrears says sometimes she cannot afford to eat
"[This includes] a new court protocol to make sure lenders are exploring all avenues before making a claim in the courts, a Ł200m mortgage rescue scheme, more free legal representation in county courts, and more free debt advice."
Repossessions have risen as more people struggle to meet their mortgage repayments as low-interest rate deals come to an end and unemployment rises.
CML director general Michael Coogan said his organisation's forecast of 45,000 repossessions this year had not changed in the light of the latest figures, but it would be "premature" to predict what might happen in 2009.
He said it was not generally in lenders' interests to repossess properties and the government needed to play its part with measures to ease the situation in the Chancellor's Pre-Budget Report.
"Conditions in the wider economy suggest a worsening picture for mortgage arrears, however carefully lenders handle their treatment of borrowers in difficulty," he said.
The CML figures suggest that life has suddenly become tougher for buy-to-let (BTL) landlords as arrears among them are now higher than among mortgage borrowers generally.
"Reasons include falling rents and an over-supply of rental property in some areas, resulting in some landlords being unable to let their property or achieve high enough rents to support their borrowing commitments," the CML explained.
It is difficult to predict what might happen in 2009, the CML says
"Fraud is also likely to have been a contributory factor," it added.
The figures show that 1.58% of BTL loans were now behind with repayments in the third quarter of the year, compared with 1.44% of all mortgages.
However the number of BTL landlords who saw their properties repossessed was, at 900, just the same as in the first and second quarters of 2008.
They amounted to just 0.08% of all BTL mortgages, compared with the slightly higher repossession rate of 0.1% for all mortgages holders.
The CML warned though that this lower BTL repossession rate "is unlikely to be maintained".
The Ministry of Justice (MoJ) figures - also released on Friday - reveal the situation earlier in the repossession process when lenders first go to court for permission to take back a mortgaged property.
The figures for England and Wales show that repossession claims - the first stage of the process - were 1% lower than in the second quarter of the year at 38,511, but 9% higher than the third quarter last year.
However the number of court orders then being made by county court judges was up 3% over the quarter, putting them 24% higher than at the same stage last year.
Not all of these will lead to actual repossessions - nearly half were suspended - as an agreement is often then reached between the lender and the borrower.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics), said that he doubted repossessions had peaked, even though the number of repossession claims had fallen.
Claims will rise as people lose their jobs and buy-to-let landlords face rising mortgage costs and falling rents, he said.
While the number of homes being seized by lenders has started to rise steeply in the past few years, they are still nowhere near as high as in the depths of the last property slump in the early 1990s.
The number of repossessions this year now stands at 30,200.
This is higher than the 26,200 for the whole of last year, and far higher than the figure of just 8,200 in 2004.
By contrast 75,500 homes were taken back in 1991.
Adam Sampson, chief executive of Shelter, said: "Lenders may claim they are using repossessions as a last resort, but they must not pat themselves on the back too soon as both repossessions and arrears are still continuing to rise."
About 5,000 properties a week are being put up for sale by people struggling with their mortgage repayments, the National Association of Estate Agents (Naea) said, also on Friday. A survey of its members reported that more than half said at least 20% of their clients had been forced into the sale by financial difficulty.
"It is those homeowners who were on cheap fixed-rate mortgage deals who cannot replace them and are struggling with the rise in repayments," Naea chief executive Peter Bolton King said.
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