Mortgage repossessions rose slightly in the three months to September compared with the previous quarter, but total repossessions this year are likely to be lower than expected, the Council of Mortgage Lenders said on Thursday.

The CML said that 9,200 repossessions took place in the third quarter of 2011, up from 9,100 in the second quarter.

In the year to September, repossessions totalled 27,500, down 4 percent in the same period of 2010, and therefore repossessions in 2011 as a whole were now likely to be below their forecast for 40,000, the CML said.

It said there was a slight fall in the number of households that fell behind with their mortgage payments.

At the end of September, the total number of mortgages with arrears of 2.5 percent or more of the outstanding balance fell to 161,600 (or 1.44 percent of all loans), 8 percent lower than the 175,100 cases (or 1.55 percent of all loans) at the end of September 2010.

However, the CML warned that the growing squeeze on household incomes could lead to more homeowners falling into mortgage arrears in the coming quarters.

Against the backdrop of widespread financial uncertainty sweeping both the UK and the wider European economies, it is impossible to be sanguine about the future influences that households may face, said CML Director General Paul Smee.