The Council of Mortgage Lenders (CML) has dramatically cut its forecast for the number of repossessions this year to just 48,000.

It had previously expected the number of homes repossessed due to mortgage arrears to reach 75,000 in 2009, before dropping its forecast to 65,000 in June.

According to the CML, the number of mortgages that were in arrears of 2.5% or more also fell in the third quarter of the year to 194,600, a proportion of 1.77% of the total.

Some 11,700 properties were repossessed between July and September up 5% on the same period last year but down from the 12,700 recorded in the first quarter.

Michael Coogan, CML director general, said the reduced forecast was due to the positive impact of lower interest rates and mortgage lenders being less quick to repossess when a customer falls into arrears.

"Borrowers should take heart from the latest findings, as they reinforce the fact that lenders really do want to keep people in their homes - and are doing so," he added.

The CML also predicted that in 2010, the number of mortgage arrears will rise "modestly" to 205,000 and the number of repossessions will reach 53,000.