Buy-to-let mortgage arrears dropped by 22% over the past year, although the number of properties repossessed by lenders increased during the latest quarter.
Figures from UK Finance show that 8,170 buy-to-let mortgages were in arrears during the third quarter of 2026. This was a 3% reduction compared with the previous quarter.
However, lenders repossessed 690 buy-to-let properties during the same period, representing a 10% quarterly increase. Despite this rise, possessions remained 23% lower than in the third quarter of 2025.
Buy-to-let mortgage arrears
Mortgages in arrears represented 0.43% of all buy-to-let lending during the quarter.
The number of landlords in the lowest arrears category increased slightly compared with the previous three months. However, this remained 18% below the level recorded a year earlier.
Numbers across all the other arrears categories declined in the buy-to-let sector.
Borrowers continue to manage repayments
James Tatch, head of analytics at UK Finance, said the latest figures showed that most borrowers were continuing to keep up with their mortgage payments despite increasing financial pressures.
He highlighted that homeowner mortgage arrears had fallen for the tenth consecutive quarter, while repossessions remained significantly below historical highs.
Tatch said the overall mortgage market remained resilient, with most customers continuing to make their repayments on time.
However, he acknowledged that households were still facing a rising cost of living, alongside the effects of the conflict in the Middle East on interest rates.
Homeowner mortgage arrears also decline
The number of homeowner mortgages in arrears fell for the tenth consecutive quarter, reaching 76,080. This was 2% lower than the previous quarter and a 10% reduction compared with the same period last year.
Across both the homeowner and buy-to-let markets, total property possessions increased from 1,780 to 1,840 during the quarter. Nevertheless, this was 20% below the figure recorded a year earlier, marking the second consecutive annual decline.
Homeowner possessions remained unchanged compared with the previous quarter and were 17% lower year-on-year. They also stayed at their lowest level since the final quarter of 2024.
Industry responds to latest mortgage figures
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the continued fall in homeowner arrears was encouraging given the pressure on household finances and the high cost of living.
However, he pointed to a slight increase in landlords within the lowest arrears category. He suggested that recent legislative changes, including the Renters’ Rights Act, could be contributing to a more challenging environment for property investors.
Harris also noted that possessions had increased compared with the previous quarter for both homeowners and buy-to-let landlords. However, the figures remained below those recorded a year earlier and were still lower than historical peaks.
He added that the latest results were positive overall, particularly given the prospect of higher mortgage rates and further Bank of England base rate increases. Most borrowers were continuing to meet their repayments, while those experiencing difficulties appeared to be receiving support from lenders.
Ian Harris, president of the National Association of Estate Agents (NAEA) Propertymark, also welcomed the reduction in mortgage arrears among homeowners and landlords.
He said the figures demonstrated borrowers’ resilience despite continued economic uncertainty and rising living costs.
However, he warned that affordability remained a major concern for the housing market. Mortgage payments and other household expenses continued to affect buyer confidence and people’s ability to move home.
He also stressed the importance of maintaining confidence in property as a long-term investment, with responsible landlord investment continuing to play an important role in supporting the supply of rental housing.
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