Landlords' buy-to-let mortgage arrears have fallen by 22% over the past year, according to UK Finance data for the third quarter of 2026. The number of buy-to-let mortgages in arrears stood at 8,170, marking a 3% decrease from the previous three months.
Despite the fall in arrears, lenders took possession of 690 buy-to-let properties during the third quarter, representing a 10% increase compared to the previous quarter. However, this figure was still 23% lower than the number recorded a year earlier.
Mortgages in arrears accounted for 0.43% of all buy-to-let mortgages in the quarter. While the number in the lightest arrears band increased modestly quarter-on-quarter, it remained 18% below its level from a year ago. Numbers in all other arrears bands within the buy-to-let sector decreased.
James Tatch, head of analytics at UK Finance, noted that borrowers are continuing to manage mortgage payments despite rising cost pressures, describing the overall picture as a resilient mortgage market. Mark Harris, chief executive of SPF Private Clients, suggested that new legislation like the Renters' Rights Act might be contributing to a tougher environment for investors, potentially explaining the increase in the 'lightest arrears' band for landlords.