The trade association for the UK banking and financial services sector has reported a reduction in the number of homeowner mortgages in arrears, with overall possession numbers ‘significantly lower’ than long-term averages.
The Q2 mortgage arrears and possessions data from UK Finance – released as RICS members reported a gloomier near-term outlook for the property market – reflects resilience in the market, the organisation said.
The number of homeowner mortgages in arrears fell by 3% in Q2 2025 compared to the previous quarter, with the number of buy-to-let mortgages in arrears falling by 5% for the same period. The overall proportion of mortgages in arrears remains low, at 1% of homeowner mortgages and 0.58% of buy-to-let mortgages.
The number of homeowner possessions increased by 10% compared to the previous quarter – however, overall possession numbers remain significantly lower than long-term averages, UK Finance said.
‘Arrears are continuing to fall across both homeowner and buy-to-let mortgages, reflecting resilience in the market’, said Charles Roe, director of mortgages at UK Finance.
“The proportion of mortgages in arrears also remains below long-term averages, even amid the current economic uncertainty. Lenders remain committed to helping customers manage their payments, and we urge anyone concerned to contact their lender early.”
Mary-Lou Press, NAEA Propertymark president, said the figures are good news for homeowners. She commented:
“This should provide some relief to the many people who have been struggling with the cost of living over the last few years and shows that introducing more affordable mortgage products has helped ease the pressures that many people have faced with paying for their mortgage.
“Should interest rates continue to drop, then this will hopefully result in more affordable mortgage products reaching the marketplace. As overall affordability increases, we should see a positive effect of repossessions decreasing further in the future.”
The full mortgage arrears and possessions data set for Q2 2025 can be seen here.
