The number of homeowner mortgages in arrears of 2.5% or more of the outstanding balance fell by 4% compared to the previous quarter, reaching 84,100 cases

Both homeowner and buy-to-let mortgage arrears dropped during the third quarter of 2025, the latest figures from UK Finance have shown.

The number of homeowner mortgages in arrears of 2.5% or more of the outstanding balance fell by 4% compared to the previous quarter, reaching 84,100 cases. Within this group, 28,940 mortgages were in the lowest arrears band, down 3% from Q2.

Buy-to-let arrears also decreased, with an 8% drop to 10,420 cases. Of these, 3,750 were in the lightest arrears band, representing a 9% fall from the previous quarter. The proportion of mortgages in arrears remains low, at 0.97% for homeowners and 0.54% for buy-to-let loans. For context, the combined total of homeowner and buy-to-let mortgages in arrears peaked at 209,600 in the first quarter of 2009.

Despite the overall decline in arrears, the number of properties taken into possession increased slightly. There were 1,390 homeowner mortgaged properties repossessed in Q3, a 4% rise on the previous quarter, while 900 buy-to-let properties were taken into possession, up 14%. However, these figures remain well below historical averages and are broadly consistent with levels seen in the five years preceding the pandemic.

The total number of mortgages in arrears continued to fall in Q3, as they have done since Q1 2024, which is a positive sign, said Charles Roe, director of mortgages at UK Finance. While possessions have risen slightly, they predominantly relate to mortgages arranged more than 10 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, he said.

For Mary-Lou Press, president of NAEA Propertymark, falls in both homeowner and buy-to-let mortgage arrears are a welcome sign that stability is returning to the housing market after a challenging period for many borrowers.