The number of people who had their homes repossessed reached a 14-year high during 2009, figures have shown.
The Council of Mortgage Lenders (CML) said 46,000 homes were repossessed last year, the highest number since 1995.
That was an increase of 6,000 on the total for 2008, but was lower than the CML's most recent forecast of 48,000.
Lenders took 10,200 properties into possession in the fourth quarter of 2009 - 13% lower than in the third quarter.
That was also a drop of 2% on the last three months of 2008.
In December 2008 the CML had predicted 75,000 homes would be repossessed in 2009.
However, in an interview with Radio 5 live, Housing Minister John Healey caused controversy when he said that, for some people, having their home repossessed was the best thing that could happen to them.
The shadow housing minister Grant Shapps said ministers had "lost touch with reality" and called on Mr Healey to apologise to "the tens of thousands of families who have lost the roof over their heads".
In terms of payment difficulties, 188,300 mortgages ended the year with arrears equivalent to at least 2.5% of the outstanding mortgage balance, the CML said.
By Ian Pollock, personal finance reporter
As it has turned out, things are not nearly as bad as they were in the housing slump of the early 1990s.
Thanks to a combination of ultra-low repayment costs, tougher court rules on repossessions, and a variety of government schemes, fewer people than anticipated are either in arrears with their mortgages or have been evicted.
Last year's 46,000 repossessions were just 61% of the total recorded in the peak year of 1991, when lenders seized 75,500 homes.
And in the past few months the position has started to improve. The CML's statistics show that short-term arrears and home seizures eased off as 2009 wore on.
But lenders are worried it may not last. About 75,000 borrowers are stuck with stubbornly high arrears.
Any rise in interest rates may well be too much for both them and their lenders, prompting a fresh bout of repossessions.
This was lower than the total of 195,000 it had forecast, and 3% lower than at the end of the third quarter of 2009. But it still marked a 3% rise on the end of 2008.
CML director general Michael Coogan said: "The fact that mortgage arrears and possessions did not rise as much as we feared in 2009 is testament to the effect of low interest rates and a great deal of concerted effort by lenders, government and the advice sector to help borrowers to address financial difficulties when they occur."
As a result, the CML said that its current forecast for 2010 of 205,000 arrears cases and 53,000 properties taken into possession may be "a little pessimistic".
However, Mr Coogan added: "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 housing charity Shelter said the number of homes being repossessed was still "completely unacceptable".
"Behind each one of these numbers is a heartbreaking story of a family losing their home and having to rebuild their lives," said Campbell Robb, the charity's chief executive.
Repossessions did not rise by as much as the CML had anticipated
"The tragedy is most people simply do not need to be repossessed. By giving clear help and advice to homeowners at risk of repossession, Shelter and other organisations successfully helps almost four out of five households avoid the immediate loss of their home when facing court proceedings."
Separately, figures from the Ministry of Justice showed that the number of potential repossessions in the pipeline in England and Wales is falling.
The number of possession actions - the first stage of an attempted repossession by a lender - launched in the courts in the fourth quarter of 2009 was 20,061. The number was 15% fewer than in the previous three months and 26% fewer than at the same time last year.
The number of possession orders agreed by judges also fell to 16,928 - 15% fewer than in the previous quarter and 42% down on the same period of 2008.
In November 2008, the government introduced the mortgage pre-action protocol which said lenders would have to demonstrate to the courts that they had exhausted all possibilities before going ahead with a repossession.
And last year, the government launched the mortgage rescue scheme, which permits not-for-profit housing associations to buy homes from people struggling to pay their mortgage and then allows them to continue living there by paying "affordable rent".
Meanwhile, the Treasury Committee said that it would be launching a follow-up inquiry into mortgage arrears after publishing an initial report in August 2009.
The inquiry will focus on households struggling with mortgage arrears and those at risk of repossession.