Mortgage arrears and possessions Q1 2025
UK Finance today releases its latest mortgage arrears and possessions data for Q1 2025, while highlighting continuing lender support for any customers facing financial difficulty.
Key information:
- The number of homeowner mortgages in arrears fell by two per cent in Q1 2025 compared to the previous quarter.
- The number of buy-to-let (BTL) mortgages in arrears fell by six per cent compared with the previous quarter.
- While the number of properties being taken into possession increased, the overall numbers remain significantly lower than long-term averages.
- Mortgage lenders continue to offer tailored support to anyone struggling with their mortgage payments.
- Anyone worried about their mortgage payments should reach out to their lender at the earliest opportunity to discuss the options available.
Homeowner and buy-to-let mortgage arrears
In the first quarter of 2025, there were 90,140 homeowner mortgages in arrears. This was a two per cent decrease compared with Q4 2024.
The number of BTL mortgages in arrears also fell, down six per cent compared with the previous quarter, to 11,830.
The overall proportion of mortgages in arrears remains low, at 1.03 per cent of homeowner mortgages and 0.61 per cent of BTL mortgages.
For comparison purposes, the number of homeowner and BTL mortgages in arrears in Q1 2009, the peak in arrears numbers during the global financial crisis, was 209,600.
During the quarter, the number of homeowner and BTL mortgages in early arrears fell, which suggests that any rise in total arrears in the next quarter will be limited.
Possessions
Although possessions numbers increased, they remain low compared to historic norms. A total of 2,030 homeowner and BTL mortgaged properties were repossessed in Q1 2025. For comparison purposes, this is 85 per cent lower than the 13,200 seen in Q1 2009.
Possessions currently taking place predominantly relate to older mortgages; with more than two-thirds of possessions relating to mortgages arranged at least a decade ago. For customers who have been struggling with payments for a long time, repossession enables them to exit their mortgage while retaining as much of their home’s equity as possible. However, lenders will always seek to ensure customers remain in their homes and possession is only ever a last resort after other options have been explored with the customer.
Lender support for borrowers
Mortgage lenders continue to offer support to help customers manage their payments, even as financial circumstances change. Anyone worried about their mortgage payments should reach out to their lender at the earliest opportunity to discuss the options available for their circumstances. Contacting your lender to find out what support is available will not impact your credit score.
Toby Leek, NAEA Propertymark President, comments.
“It’s extremely positive to see mortgage arrears drop to their lowest level since 2009. There has been much progress within the sector to help ensure the overall lending criteria are more robust and offer consumers a higher degree of safety regarding their affordability.
“However, it is concerning to see repossessions witness an increase within the first quarter of 2025, as it demonstrates there is still an aftershock regarding the recent surge in the cost of living and support available to those who may need genuine help in the short to medium term.”
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