UK Finance Mortgage arrears and possessions Q4 2025
UK Finance today releases its latest mortgage arrears and possessions data for Q4 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 nine per cent compared with the previous quarter.
The number of properties taken into possession decreased compared with the previous quarter, and 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 fourth quarter of 2025, there were 80,490 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. The overall proportion of mortgages in arrears remains low, at 0.92 per cent of homeowner mortgages and 0.5 per cent of BTL mortgages.
Within this total, 27,780 homeowner mortgages were in the lightest arrears band (representing between 2.5 and 5 per cent of the outstanding balance), four per cent fewer than in the previous quarter.
The number of BTL mortgages in arrears also fell, down nine per cent compared with the previous quarter, to 9,520.
Within this total, 3,480 BTL mortgages were in the lightest arrears band, seven per cent fewer than in the previous quarter.
For comparison purposes, the number of homeowner and BTL mortgages in arrears in Q2 2009, the peak in arrears numbers during the global financial crisis, was 216,400.
Possessions
Possession numbers decreased in Q4 2025 and remain low compared to historic norms. A total of 1,210 homeowner mortgaged properties were taken into possession in Q4 2025, 13 per cent fewer than in the previous quarter.
770 BTL mortgaged properties were taken into possession, 14 per cent fewer than in the previous quarter. Overall, possessions remain significantly below long-term averages.
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.
James Tatch, Head of Analytics at UK Finance, said:
“The number of mortgages in arrears continued to fall in Q4, with BTL arrears down 25 per cent compared to the end of 2024, and homeowner arrears down 13 per cent. We have also seen a decline in possessions in Q4 due to lenders’ commitment to keep people in their homes over the Christmas period. As ever, the number of possessions remain low by historic standards and are 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.”
Mary-Lou Press, President of NAEA Propertymark (National Association of Estate Agents), comments:
“We are starting to witness the positive impact of proactive lender engagement and the resilience shown by many borrowers despite ongoing cost-of-living pressures and higher interest rate environments over recent years. The fact that arrears levels are a fraction of those seen during the 2009 financial crisis offers important reassurance about the overall stability of the housing market.
“The decline in buy-to-let arrears is particularly notable. A stable and financially secure landlord base is essential to sustaining supply in the private rented sector at a time when demand remains extremely high. Continued lender flexibility and early engagement will be key to ensuring landlords can manage financial pressures while maintaining much-needed rental homes.
“However, while the overall numbers are encouraging, over 80,000 homeowner mortgages remain in arrears and possessions, and although low, they represent that many households continue to experience significant financial pressures. It is vital that borrowers continue to seek support early and that lenders maintain a pragmatic, tailored approach to repayment solutions.”
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