Press release UK Finance: Mortgage arrears and possessions - Q1 2026

Key Information

• The number of homeowner mortgages in arrears in Q1 2026 was two per cent lower than the previous quarter.
• The number of buy-to-let (BTL) mortgages in arrears was six per cent lower than the previous quarter.
• The overall proportion of mortgages in arrears remains low, at 0.91 per cent of homeowner mortgages and 0.47 per cent of BTL mortgages.
• The number of properties taken into possession increased compared with the previous quarter, but are flat year-on-year and overall numbers remain significantly lower than long-term averages.
• Mortgage lenders continue to offer tailored support to anyone struggling with their mortgage payments.
• Anyone worried about their mortgage payments should reach out to their lender at the earliest opportunity to discuss the options available.

Homeowner and Buy-to-Let Mortgage Arrears

In the first quarter of 2026, there were 79,110 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance. This was a two per cent decrease compared with Q4 2025.

The number of BTL mortgages in arrears also fell, down six per cent compared with the previous quarter and down almost a quarter (24 per cent) year-on-year, to 8,960.The overall proportion of mortgages in arrears remains low, at 0.91 per cent of homeowner mortgages and 0.47 per cent of BTL mortgages.

For comparison purposes, the number of homeowner and BTL mortgages in arrears in Q2 2009, the peak in arrears numbers during the global financial crisis, was 216,400.

Possessions

Possession numbers increased slightly in Q1 2026 compared to the previous quarter, but remain low compared to historic norms. A total of 1,250 homeowner mortgaged properties were taken into possession in Q1 2026, 38 (or 3 per cent) more than in the previous quarter.

810 BTL mortgaged properties were taken into possession, 5 per cent greater than in the previous quarter and flat year-on-year. Overall, possessions remain significantly below long-term averages.

Possessions currently taking place predominantly relate to older mortgages, with more than two-thirds of possessions relating to mortgages arranged at least a decade ago. For customers who have been struggling with payments for a long time, repossession enables them to exit their mortgage while retaining as much of their home's equity as possible. However, lenders will always seek to ensure customers remain in their homes, with possession only ever taking place as a last resort once all other options have been explored with the customer.

Lender Support for Borrowers

Mortgage lenders continue to offer support to help customers manage their payments, even as financial circumstances change. Anyone worried about their mortgage payments should reach out to their lender at the earliest opportunity to discuss the options available for their circumstances. Contacting your lender to find out what support is available will not impact your credit score.

James Tatch, Head of Analytics at UK Finance, said:

The number of mortgages in arrears continues to fall for both residential and buy-to-let mortgages. While possessions are up very slightly on the previous quarter, they remain low by historic standards.

Lenders stand ready to support customers who may be worried about meeting their repayments. We would always recommend customers contact their lender as soon as possible to discuss the tailored help available.