One in 64 mortgages has arrears of 2.5% or more and one in 53 mortgages is in arrears of three months or more.
The CML said many steps were being taken to help borrowers facing difficulty.
It believes the fact that there were 11% fewer repossessions than expected, despite a worsening economy and rising unemployment, demonstrates that mortgage lenders are making strenuous efforts to ensure that repossession really is a last resort.
And the CML said it was also important to recognise that repossessions included a proportion of abandoned properties and property fraud. They also included buy-to-let repossessions, as well as home-owner repossessions.
In the vast majority of cases where home-owners were committed to working with their lender to keep their home, this outcome was successfully achieved.
CML director general Michael Coogan said: "Despite the upward pressure on mortgage arrears and repossessions arising from the problems in the economy and rising unemployment, both lenders and Government are continuing to find more ways to help more people stay in their homes.
"But there seems to be a sharp rise in cases where borrowers are handing back their keys or abandoning their properties. We strongly urge borrowers to contact their lender and work with them before taking this step, as there may be other solutions. Borrowers are still liable for their debt, even if they leave the property, so working through their problems is much more likely to be in their best interests."
"We know the plethora of schemes and initiatives is daunting, and we are working closely with Government and advice agencies to try to simplify the information available, and ensure that those borrowers who may qualify for help get access to the information and advice that they need at the right time."
At the end of 2008, around 182,600 mortgages – or 1.57% of the total – had accumulated arrears equivalent to 2.5% or more of the outstanding balance – for example, £2,500 or more on a £100,000 balance (a £97,500 mortgage plus £2,500 arrears). This compares with 1.29% at the end of the third quarter of 2008, and 1.08% at the end of 2007.
On a "number of months" basis, 219,100 mortgages were in arrears of more than three months at the end of 2008, up from 166,600 at the end of the third quarter of the year, and up from 127,500 at the end of 2007.
However, the big reduction in mortgage rates experienced in 2008 was a significant influence on the rise in the number of arrears cases measured on a "number of months" basis – as the same given sum of arrears represents a higher number of months payments as interest rates fall.
The CML said the vast majority of people who faced temporary difficulties successfully worked with their lender to stay in their homes, and got their mortgage back on track over time.
Where borrowers contacted their lender early, maintained good communication and were committed to paying what they could and resolving their arrears, lenders worked hard to help wherever the household’s future prospects looked feasible.
The CML also said a range of new Government measures was beginning to help some households whose problems may be too deep-rooted for lender forbearance alone to resolve.
• Changes to Income Support for Mortgage Interest, enabling eligible claimants to start receiving the benefit after three months rather than the nine months they previously had to wait.
• Government’s mortgage rescue scheme, enabling housing associations either to take a share in the equity or to buy the property outright and rent it back to the former owner, which is being delivered through local authorities. This is for "priority need" households such as people with dependant children, the elderly, or those with a disability.
• Initiatives from some local authorities, which vary considerably in type and scope, but are designed to give local home owners a breathing space through short-term difficulties.
• Imminent Home-owner Mortgage Support Scheme, which will hopefully make it easier for lenders to show forbearance to more borrowers and for longer by the Government guaranteeing part of the increased risk lenders face when they allow borrowers to under pay.
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