A pre-action protocol has been introduced, under which courts can grant a repossession order only if all alternatives to keep people in their home have failed.

Many hard-pressed borrowers have also benefited from unprecedented cuts in interest rates, which are down from 5% last October to the current 0.5%.

However, the repossession figures were still described as “pretty ugly” by Chris Tapp, director of the debt charity Credit Action.

And Shelter accused sub-prime lenders, who specialise in offering mortgages to borrowers with poor credit histories, of failing to comply with the government call to show patience with families in trouble.

Chief executive Sam Younger, said: “These figures paint a very depressing picture of thousands of homeowners across the country struggling to keep up with their mortgage repayments, with many more losing the roof over their head.

“There have been moves to help struggling homeowners, but some lenders are clearly still not doing everything that they can to keep people in their homes.”

Mrs Beckett said: “While this is no time for complacency, the action we have taken together with the work of lenders is giving borrowers more breathing space.”