Repossession numbers began to rise again during the early part of 2011, jumping by 15% following five consecutive quarters during which levels had declined, figures showed.
A total of 9,100 properties were taken over by lenders during the three months to the end of March - more than 97 each day - the first increase since the third quarter of 2009, according to the Council of Mortgage Lenders.
The group has predicted that a total of 40,000 people will lose their homes this year, up from 36,300 in 2010, due to the squeeze on household incomes as a result of the combination of rising taxes and living costs and slow wage growth.
But despite the increase in repossessions, the Council of Mortgage Lenders (CML) stressed that the figure was still 10% below the level for the first quarter of 2010, and in line with the average seen throughout that year.
There was also a further fall in the total number of people who were behind with their mortgage, with this dropping for the seventh consecutive quarter.
Around 166,900 people were in arrears of at least 2.5% of their outstanding loan at the end of March, the lowest level since the third quarter of 2008, although there was a slight rise in the number of people who had arrears of more than 10%.
Repossession levels have remained lower than expected during the economic downturn due to a combination of low interest rates, Government support schemes and increased forbearance by lenders.
The group said the low base rate should continue to help people keep up with their mortgage repayments, despite the other financial pressures that they face.
But it added that City regulator the Financial Services Authority had expressed concern that "excessive" lender forbearance may be storing up problems for the future. Industry commentators have also warned that Government initiatives to help keep people in their homes may simply be delaying a spike in repossession numbers.