Banks are generally reluctant to repossess properties as it puts them in a bad light with the public, it has been said.

Ian Boden-Smyth, money advice coordinator at the UK Insolvency Helpline, said the recent fall in repossessions may be due to people being able to transfer their mortgages to interest-only deals.

This, he believes, allows people to take advantage of the savings they can make due to falling interest rates.

"They are managing to keep up with their payments. They are not really paying much of the loan off, but they are stopping repossessions," Mr Boden-Smyth suggested.

However, he anticipates that there will be a second wave of repossessions once the base rate starts to increase again.

John Charcol reported on August 13th that around two million households are either in negative equity or have equity of less than ten per cent.

The company estimated that 500,000 households have equity of between ten and 15 per cent and a further one million households have either sub prime or self-certified mortgages.