Mortgage arrears and possessions Q2 2025
UK Finance today releases its latest mortgage arrears and possessions data for Q2 2025, while highlighting continuing lender support for any customers facing financial difficulty.
Key Information
The number of homeowner mortgages in arrears fell by 3 per cent in Q2 2025 compared to the previous quarter.
The number of buy-to-let (BTL) mortgages in arrears fell by 5 per cent compared with the previous quarter.
While the number of homeowner possessions increased, overall possession 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 second quarter of 2025, there were 87,380 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance. This was a 3 per cent decrease compared with Q1 2025.
Within this total 29,840 homeowner mortgages were in the lightest arrears band (between 2.5 and 5 per cent of the outstanding balance), also down 3 per cent from the previous quarter.
The number of BTL mortgages in arrears fell by 5 per cent to 11,270. Of these, 4,100 BTL mortgages were in the lightest arrears band, down 6 per cent compared with Q1.
The overall proportion of mortgages in arrears remains low, at 1.00 per cent of homeowner mortgages and 0.58 per cent of BTL mortgages.
Possessions
Although possessions increased slightly, they remain low compared to historic norms. A total of 1,340 homeowner mortgaged properties were taken into possession in Q2 2025, 10 per cent higher than in the previous quarter.
In contrast, 790 BTL mortgaged properties were repossessed, 2 per cent fewer than in Q1 2025.
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, helping them prevent repossession of the house through early intervention. 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.
Charles Roe, Director of Mortgages, at UK Finance:
“Arrears are continuing to fall across both homeowner and buy-to-let mortgages, reflecting resilience in the market. The proportion of mortgages in arrears also remains below long-term averages, even amid the current economic uncertainty. Lenders remain committed to helping customers manage their payments, and we urge anyone concerned to contact their lender early. Support is always available and exploring available options with your lender will not affect your credit score.”
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