Mortgage arrears fell during the first quarter of 2014 to hit their lowest level since 2008, according to new figures from the Council of Mortgage Lenders (CML).
But brokers have warned that the number of arrears and repossessions are still too high, given today's all-time low mortgage rates.
Some 138,200 mortgages were in arrears of more than 2.5% in the first three months of this year, representing 1.24% of the market, CML figures show.
This compares to 144,600 and 1.29% in the final quarter of 2013.
And it marks an even sharper drop from 159,700 and 1.42% one year ago.
There was a seasonal rise in repossessions in the first quarter, up 300 to 6,400 compared to the final quarter of last year.
But that is still 20% down on 8,000 repossessions in the first quarter of 2013.
The figures cover both owner-occupier and buy-to-let mortgages.
Around 1.7% of home-owner mortgages had arrears equivalent to at least three months' mortgage payments, against 0.9% among buy-to-let mortgages.
CML director general Paul Smee said: "The downward trend in the number of mortgages in arrears or ending in repossession is obviously very welcome.
"Repossession is absolutely the last resort, the aim is to keep people in their home and get their finances back on track wherever possible."
Separate figures released yesterday by the Finance & Leasing Association showed a 43.4% fall in second-charge mortgage repossessions in Q1, compared with the same period last year.
The rate of repossessions remains low at 0.049%, with lenders only taking repossession action as a last resort, the FLA said.
Mark Harris, chief executive of mortgage broker SPF Private Clients, welcomed the CML figures, but warned the trend could reverse when base rates start rising.
"Low interest rates and the continued forbearance shown by lenders mean the number of homes being repossessed continues to fall.
"But given that interest rates are so low it is worrying that there are still thousands of people falling behind on their mortgage payments and losing their homes."
Richard Sexton, director of e.surv chartered surveyors, said the economic upturn has eased the pressure on everyday finances, allowing many homeowners to clear debts.
But he warned there is still a prominent North-South divide. "Last year, eight out of 10 northern towns were home to more repossessions than the average.
"The North West and the North East in particular are still paying the price of recession-driven public sector job cuts, and both regions still contain many repossession hotspots."
The introduction of MMR will help ensure repossessions remain low in the future, Sexton said.
"Many of those struggling now are paying the price for carefree pre-crash lending. But the mortgage market won't be allowed to make that mistake again.
"Stress testing will ensure that the next generation of borrowers are financially stable enough to afford their repayments, even as interest rates rise."
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