The overall proportion of mortgages in arrears remains low, at 1% of homeowner mortgages and 0.58% of BTL mortgages

Buy to let mortgage repossessions are up by 11% year-on-year, which is a stark warning to landlords, says Moneyfacts.

Finance expert Rachel Springall comments: Over the years landlords have been facing hits from all sides, so it is worrying to see a growing number of borrowers can no longer keep up with mortgage repayments and are having properties repossessed.

Those landlords with a portfolio may have to sell up in the coming months if they are finding their margins squeezed. Investors typically expect to make better profits if investing in multiple properties, but by the same notion, it can open them to more risk if property prices plummet and they are locked into a mortgage or have no tenant for an extended period of time, Springall said.

UK Finance figures show that homeowner mortgage repossessions are up 47% year-on-year, which is concerning, and according to the Bank of England, the rate charged on outstanding mortgages rose to 3.88% in June, up from 2.93% in June 2024 and 2.17% in June 2020, she added.

Not all of the latest data from UK Finance has spread alarm, however.

The number of Buy to Let mortgages in arrears fell by 5% in the second quarter of 2025: this equates to 11,270 mortgages. Of these, 4,100 were in the lightest arrears band (that is, between 2.5% and 5% of the outstanding balance), down 6% compared with Q1.

The overall proportion of mortgages in arrears remains low, at 1% of homeowner mortgages and 0.58% of BTL mortgages.

In the second quarter of 2025, there were 87,380 homeowner mortgages in arrears of 2.5% or more of the outstanding balance. This was a 3% decrease compared with Q1 2025.  Within this total 29,840 homeowner mortgages were in the lightest arrears band, also down 3% from the previous quarter.

But total of 1,340 homeowner mortgaged properties were taken into possession in Q2 2025, 10% higher than in the previous quarter.