Mortgage arrears fell in the third quarter of 2025, but repossessions rose, according to trade body UK Finance.
UK Finance said there were 84,100 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in the third quarter of 2025, down 4 percent on the previous quarter.
Within this were 28,940 mortgages from homeowners with the slightest payment arrears, representing between 2.5 and 5% of the outstanding balance. This was 3% less than in the previous quarter.
There were 10,420 buy-to-let (BTL) mortgages in arrears of 2.5% or more of the outstanding balance in the third quarter of 2025, down 8% on the previous quarter.
Within the total, there were 3,750 BTL mortgages with the lightest payment arrears, again accounting for between 2.5 and 5% of the outstanding balance. This was 9% less than in the previous quarter.
Mortgages in arrears accounted for 0.97% of all outstanding homeowners’ mortgages in the third quarter of 2025, and 0.54% of all outstanding BTL mortgages.
The number of repossessions for mortgaged properties increased by 4% to 1,390 in the third quarter of 2025. UK Finance said this was “significantly below the long-term average”.
There was a sharp increase in the number of homes foreclosed on BTL mortgages, with 900 taken over by lenders in the third quarter – a 14% increase on the previous quarter.
The findings are consistent with those of Pepper Advantage, which also noted this payment arrears occurred in the third quarter, albeit by 0.3%.