Fall in mortgage arrears and home repossessions in ‘encouraging’ figures

Vicky Shaw – Press Association Personal Finance Correspondent

The number of homes being repossessed has fallen, despite financial squeezes on homeowners and landlords.

Some 1,150 homeowner mortgaged properties were repossessed in the second quarter of 2026, which was 8% less than in the previous quarter and 14% less than the same period a year earlier, UK Finance said.

And 630 buy-to-let mortgaged properties were also repossessed, which was 22% less than in the previous quarter and a 20% fall compared with the same period a year earlier.

Overall, repossessions remain significantly below long-term averages, UK Finance said.

It added that the repossessions currently taking place predominantly relate to older mortgages, with more than two-thirds of repossessions relating to mortgages arranged at least a decade ago.

Some 77,940 homeowner mortgages were in arrears of 2.5% or more of the outstanding balance in the second quarter of 2026, which was 1% fewer than in the previous quarter and an 11% annual fall.

And 8,390 buy-to-let mortgages were also in this level of arrears, which was a 6% fall compared with the previous quarter and a 26% annual decrease, UK Finance said.

James Tatch, head of analytics at UK Finance, said: “The number of mortgages in arrears are falling for both residential and buy-to-let mortgages – and possessions are also down year-on-year for the first time since late 2023, and remain significantly below the long-term historic average.

“If you are concerned about meeting repayments, the first port of call is always to speak to your lender.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Despite rising mortgage rates on the back of the Middle East conflict, the downwards trend in arrears and possessions continues.”

He added: “The figures also indicate that lenders continue to show forbearance and are working with borrowers to try and find a solution when the latter find themselves in difficulty.

“For a lender to take repossession of a property really is the last resort – they would much prefer an open dialogue way in advance of this needing to happen.

“There may be options open to the borrower, whether it is just a blip or a longer-term issue, such as a payment holiday, switching to interest only for a while or extending the mortgage term.

“However, it is important that this conversation is started sooner rather than later and that borrowers don’t ignore the problem as that will only make matters worse.”

Ian Harris, president of NAEA (National Association of Estate Agents) Propertymark said: “Whilst these figures are encouraging, it is important not to lose sight of the financial pressures that continue to affect homeowners and landlords.

“The reduction in mortgage arrears and repossessions is welcome, but affordability remains a challenge for many across the housing market.

“Early engagement is key to helping those facing financial difficulty, providing an opportunity to explore the support and options available before circumstances become more difficult to resolve.”

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