Fewer homes were repossessed last year than in any year since 1982. A total of 7,700 UK homes were repossessed last year compared with 10,200 in 2015, figures from the Council of Mortgage Lenders (CML) show.
Homes are seized in this way if borrowers are consistently unable to meet their mortgage repayments.
The CML said that falling mortgage interest rates had eased the burden.
The figures reveal that the proportion of buy-to-let properties that are being repossessed has risen significantly.
At the recent peak of home seizures in 2009, about a tenth of the homes repossessed were in the buy-to-let sector. Although the total number of home repossessed from landlords has fallen, this now represents a third of the total.
The number of homes repossessed overall fell in the final three months of the year, down from 1,900 in the third quarter of the year to 1,800 in the fourth quarter.
Mortgage-holders falling into arrears on their home loans also fell compared with the previous year.
The were 94,100 mortgages with arrears of 2.5% or more of the outstanding balance by the end of 2016, the CML said, compared with 101,700 at the end of 2015.
This was slightly up on the 93,300 mortgages in this position by the end of September.