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UK finance arrears and possessions data

ended 12. February 2026

Any thoughts on the below, ASAP. New data out from UK Finance. 

  • There were 80,490 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance in the fourth quarter of 2025, 4 per cent fewer than in the previous quarter. 
  • Within the total, there were 27,780 homeowner mortgages in the lightest arrears band (representing between 2.5 and 5 per cent of the outstanding balance). This was 4 per cent fewer than in the previous quarter. UK Finance: Mortgage Arrears and Possessions Update Quarter 4 2025 Release date: 12 February 2026 14 May 2026 
  • There were 9,520 buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance in the fourth quarter of 2025, 9 per cent fewer than in the previous quarter. 
  • Within the total, there were 3,480 buy-to-let mortgages in the lightest arrears band (representing between 2.5 and 5 per cent of the outstanding balance). This was 7 per cent fewer than in the previous quarter. 
  • Mortgages in arrears accounted for 0.92 per cent of all homeowner mortgages outstanding, and 0.50 per cent of all buy-to-let mortgages outstanding in the fourth quarter of 2025.
  • 1,210 homeowner mortgaged properties were taken into possession in the fourth quarter of 2025, 13 per cent fewer than in the previous quarter. This remains significantly below the long-term average (see chart below). 
  • 770 buy-to-let mortgaged properties were taken into possession in the fourth quarter of 2025, 14 per cent fewer than in the previous quarter

2 responses from the Newspage community

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Jonathan Alvarez Herrera
Mortgage Consultant at Ayla Mortgages
UK Finance’s Q4 2025 figures suggest the market is showing signs of stabilisation, with both homeowner and buy-to-let arrears falling compared to the previous quarter. Homeowner arrears now represent 0.92% of all mortgages outstanding, while buy-to-let arrears stand at 0.50%, reinforcing that overall arrears levels remain low by historical standards.

It is also encouraging to see possessions down again, with 1,210 homeowner and 770 buy-to-let properties taken into possession in Q4, both notably below long-term averages. This reflects the impact of lenders continuing to offer forbearance and borrowers adapting to the higher-rate environment.

However, while the trend is positive, many households are still under pressure as fixed rates continue to reset. Ongoing cost of living pressures mean brokers should remain proactive in reviewing clients’ options early, particularly those approaching product maturity or experiencing affordability strain
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Patricia McGirr
Founder at Repossession Rescue Network
Arrears are easing, but this is stabilisation, not recovery.

Yes, the quarterly drop looks reassuring on the surface. Fewer homeowners and landlords are slipping behind, and possessions remain well below long term averages. That tells us lenders are still showing forbearance and borrowers are prioritising the mortgage above almost everything else.

But 80,000 households in meaningful arrears is not a footnote. It is a warning light. Many are surviving by cutting elsewhere, leaning on credit or burning through savings. That is pressure being displaced, not resolved.

The system is holding, just. The real question is what happens if rates stick higher for longer or incomes wobble. Resilience is being tested quietly, one household at a time.