The number of repossessed properties fell last year to the lowest level since 1982.
Data from the Council of Mortgage Lenders shows the number of properties taken into possession in 2016 declined year-on-year by almost 25% to 7,700.
This compares with 10,200 in 2015.
The number of possession cases declined in the fourth quarter of 2016, as well as over the year as a whole. In the final three months of the year, 1,800 properties were taken into possession, down from 1,900 in the preceding quarter and 2,200 in the final quarter of 2015.
The number of buy-to-let properties taken into possession in the final quarter of last year was unchanged, at 600. In the final quarter of 2016, a total of 1,200 owner-occupied properties were taken into possession, down from 1,300 in the preceding quarter and 1,500 in the final three months of 2015.
The number of mortgages in arrears fell 7%. There was, however, an increase over 2016 in the number of mortgages with arrears of more than 10% of the balance, from 23,700 to 26,000.
But this figure may also have been distorted by the timing of possession actions, the CML said.
In the buy-to-let sector, the number of mortgages in arrears was unchanged in the fourth quarter of last year at 5,000, but 11% lower than at the end of 2015 when it was 5,600.
The number of owner-occupier mortgages in arrears edged upwards in the final quarter of last year, from 88,300 to 89,200, but was lower than the 96,200 total at the end of the previous year.
Paul Smee, director general of the CML, said: “It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates.
“Lenders remain committed to helping borrowers work through any period of temporary payment difficulty and remain in their home wherever possible.”