Mortgage arrears and possessions Q3 2025
UK Finance today releases its latest mortgage arrears and possessions data for Q3 2025, while highlighting continuing lender support for any customers facing financial difficulty.
Key Information
- The number of homeowner mortgages in arrears fell by four per cent in Q3 2025 compared to the previous quarter.
- The number of buy-to-let (BTL) mortgages in arrears fell by eight per cent compared with the previous quarter.
- While the number of properties being taken into possession increased slightly, 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 third quarter of 2025, there were 84,100 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance. This was a four per cent decrease compared with Q2 2025.
Within this total, 28,940 homeowner mortgages were in the lightest arrears band (representing between 2.5 and 5 per cent of the outstanding balance), three per cent fewer than in the previous quarter.
The number of BTL mortgages in arrears also fell, down eight per cent compared with the previous quarter, to 10,420.
Within this total, 3,750 BTL mortgages were in the lightest arrears band, nine per cent fewer than in the previous quarter.
The overall proportion of mortgages in arrears remains low, at 0.97 per cent of homeowner mortgages and 0.54 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.
Possessions
Although possessions numbers increased, they remain low compared to historic norms. A total of 1,390 homeowner mortgaged properties were taken into possession in Q3 2025, four per cent greater than in the previous quarter.
In addition, 900 BTL mortgaged properties were taken into possession, 14 per cent greater than in the previous quarter.
Even with these increases, possessions remain significantly below long-term averages. Current levels are broadly in line with those seen in the five years before the pandemic, as shown in the chart below.
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, with possession only ever taking place as a last resort once all 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.
Charles Roe, Director of Mortgages, at UK Finance:
“The total number of mortgages in arrears continued to fall in Q3, as they have done since Q1 2024, which is a positive sign. While possessions have risen slightly, they predominantly relate to mortgages arranged more than ten years ago and remain low by historic standards and broadly in line with pre-pandemic levels.
“Lenders remain committed to supporting customers who may be struggling. If you are worried about your mortgage payments, please contact your lender as soon as possible to discuss the tailored help available.”
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UK Finance Mortgage arrears and possessions Q4 2025
