In the second quarter of 2026, there were 77,940 homeowner mortgages in arrears of 2.5% or more of the outstanding balance, 1% fewer than in the previous quarter.
There were 8,390 buy-to-let (BTL) mortgages in arrears of 2.5% or more of the outstanding balance in the second quarter of 2026, 6% fewer than in the previous quarter.
In sum, mortgages in arrears accounted for 0.89% of all homeowner mortgages outstanding, and 0.44% of all BTL mortgages outstanding in the second quarter of 2026.
Repossessions down since Q1
Possession numbers decreased in Q2 2026 compared to the previous quarter and were significantly below the long-term average.
A total of 1,150 homeowner mortgaged properties were taken into possession in Q2 2026. This was 8% lower than the previous quarter, and down 14% year-on-year.
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There were 630 BTL mortgaged properties taken into possession, 22% fewer than in the previous quarter and 20% lower than this time last year.
UK Finance said the possessions taking place were mostly related to older mortgages, the same sentiment shared last quarter.
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.”
Melanie Spencer, growth director at Target Group, said: “A further fall in mortgage arrears suggests that despite the financial pressures households have faced in recent years, mortgage borrowers are managing to stay in the black. Meanwhile, lenders continue to ensure that any mortgage distress remains contained, highlighting their good work on early intervention and forbearance. While positive, it’s important to view these latest figures against an economic backdrop that remains complex and difficult to predict.”
She added: “As a result, falling arrears shouldn’t mean complacency. There’s no question that borrowers will continue to be tested as they come to refinance and lenders need to be ready to identify and support those customers as soon as their circumstances change. While possessions have declined in this quarter, lenders still need to be alive to this challenge too, managing these cases effectively and sensitively.”
