UK Finance has released its latest mortgage arrears and possessions data for the second quarter of 2026. The figures indicate a fall in both homeowner and buy-to-let mortgages in arrears, alongside a reduction in properties taken into possession.
There were 77,940 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in Q2 2026, a 1% decrease from the previous quarter. For buy-to-let mortgages, 8,390 were in arrears of 2.5% or more, marking a 6% reduction over the same period.
Possession numbers also saw a decline. A total of 1,150 homeowner mortgaged properties were taken into possession in Q2 2026, which is 8% less than the previous quarter and 14% less than one year ago. Buy-to-let possessions decreased by 22% from the previous quarter and 20% year-on-year, with 630 properties taken into possession. Overall, possessions remain significantly below long-term averages.
James Tatch, head of analytics at UK Finance, noted that arrears are falling for both residential and buy-to-let mortgages, and possessions are down year-on-year for the first time since late 2023. Industry experts, including Ian Harris of NAEA Propertymark, acknowledge these encouraging figures but highlight that financial pressures continue to affect homeowners and landlords.