Two sets of official figures published at the same time appear to tell conflicting stories about the private rented sector.
The latest figures from UK Finance show a 26% annual fall in buy-to-let mortgages in arrears, while Ministry of Justice data shows that the number of landlord possession claims has increased.
At first glance, these figures may seem difficult to reconcile. However, they measure two very different situations. Mortgage arrears indicate financial pressure on landlords, whereas a possession claim simply means a landlord has started the legal process to recover a property from a tenant.
The difference could provide a useful insight into what is happening across the rental market.
Buy-to-Let Mortgage Arrears Continue to Fall
UK Finance recorded 8,390 buy-to-let mortgages in arrears by at least 2.5% of the outstanding balance during Q2 2026.
That represents a 6% decrease compared with the previous quarter and a much larger 26% reduction compared with Q2 2025.
The decline was visible across the different levels of arrears. For example, mortgages with arrears equivalent to between 7.5% and 10% of the outstanding balance were down by 36% year-on-year.
Mortgage possessions also declined.
There were 630 buy-to-let properties taken into possession during the second quarter, down 22% from Q1 and 20% compared with the same period last year.
UK Finance says possessions remain well below historic averages, suggesting that the buy-to-let market is not experiencing a widespread mortgage crisis.
That does not mean landlords are free from financial pressures. Higher borrowing costs, maintenance expenses, taxation and increasing regulatory requirements can all affect profitability.
However, the figures suggest that most landlords with mortgages are continuing to keep up with their repayments, while serious arrears have actually fallen.
Landlord Possession Claims Are Increasing
The picture looks different when looking at court proceedings involving landlords and tenants.
According to the Ministry of Justice, 23,635 landlord possession claims were issued between April and June 2026.
That was 6% higher than the 22,352 claims recorded during the same period in 2025.
The increase was particularly noticeable in accelerated possession claims, which rose by 16% to 8,569.
Private landlords using the standard possession process also saw claims rise by 5%, reaching 7,617. By comparison, claims from social landlords fell by 3% to 7,449.
However, an important distinction needs to be made: a possession claim does not automatically mean an eviction has taken place.
A claim is simply the beginning of the court process. The court may refuse possession, suspend an order or allow the tenant additional time to resolve the situation.
The number of completed repossessions actually fell. Landlord possession warrants were down 6% to 9,715, while county court bailiffs carried out 6,560 repossessions, a 3% annual reduction.
The median time between a landlord starting a claim and the property being repossessed was also substantial, at 27.1 weeks.
Could the Renters’ Rights Act Be Affecting the Figures?
The timing of the latest figures is particularly important.
The first phase of the Renters’ Rights Act came into force in England on 1 May 2026, bringing major changes to the private rented sector.
Section 21 was abolished, assured shorthold tenancies were replaced with assured periodic tenancies, and landlords became more reliant on the revised Section 8 possession grounds.
There was also a deadline for landlords who had already served a valid Section 21 notice before the reforms took effect. Those landlords had to begin court proceedings within the relevant time limit, subject to the final transitional deadline.
The Q2 figures cover April, May and June, meaning they include the period immediately before the reforms and the first two months after they came into effect.
The 16% increase in accelerated possession claims could therefore partly reflect landlords trying to complete existing Section 21 cases before the previous system disappeared.
However, it would be too early to say that the Renters’ Rights Act directly caused the increase.
The Ministry of Justice covers England and Wales in its possession statistics, while the first phase of these particular reforms applies to England. There are also numerous reasons why a landlord might seek possession.
These can include rent arrears, antisocial behaviour, selling the property or wanting to move themselves or a family member into the home.
Landlords Do Not Have to Be in Arrears to Leave
One of the most important points to consider is that a landlord does not need to be struggling financially to decide to sell a property.
A landlord could be completely up to date with their mortgage and still decide that being a landlord is no longer worthwhile.
They may want to:
- Sell an underperforming property
- Reduce their borrowing
- Release equity
- Retire from property investment
- Reduce the size of their portfolio
- Move their money into another investment
- Avoid increasing regulation and administration
This helps explain how mortgage arrears can fall while possession claims rise.
The two figures are not measuring the same thing.
A mortgage possession generally indicates serious financial distress, where the lender has taken control of a property.
A landlord possession claim, on the other hand, can be the result of a tenant-related problem or a commercial decision by the property owner.
Landlord Plans Suggest Some Are Considering an Exit
There is evidence that a significant number of landlords have been considering reducing their portfolios.
The Government’s English Private Landlord Survey 2024 found that 31% of landlords planned to reduce the size of their portfolios over the following two years, including 16% who intended to sell all of their rental properties.
Only 7% said they planned to expand their portfolios.
Among landlords planning to reduce their holdings, 66% cited recent tax or legislative changes as a factor. A further 44% mentioned upcoming legislation, while 40% pointed to issues affecting the viability of property investment, including higher interest rates.
These intentions do not necessarily mean every landlord will eventually sell. A property sold by one landlord could also be purchased by another investor.
Nevertheless, the figures demonstrate that landlords considering an exit are not a particularly unusual group.
More recent sentiment surveys also suggest that some landlords remain cautious about expanding their portfolios.
A Property118 survey of its readers in Q1 2026 found that 39.7% of respondents expected to sell at least one property, while 17.3% expected to leave the sector altogether. Only 6.8% said they planned to buy more property.
The survey was conducted among Property118 readers and should not be treated as a representative forecast for the entire UK landlord population. However, it does provide an indication of sentiment among a section of active landlords.
Interestingly, 29.3% of respondents said they had no mortgage, while more than 60% were either mortgage-free or had an average loan-to-value ratio of 50% or less.
This suggests that some landlords considering selling may not be under financial pressure at all.
They may simply believe that their capital could be put to better use elsewhere.
More Possession Restrictions Could Have Wider Effects
There is a clear need to protect tenants from poor landlords and ensure that renters have access to safe, secure and well-maintained homes.
At the same time, landlords need a reasonable and predictable way to regain possession when there is a legitimate reason to do so.
Tenant security is not simply about making it harder for landlords to recover properties. It also depends on maintaining a sufficient supply of rental homes.
If the cost, uncertainty or length of the possession process increases, some landlords may respond by selling properties rather than re-letting them. Others could become more cautious when choosing tenants or reduce the amount they are willing to invest in improvements.
This does not mean every landlord will react in the same way. But changes to risk and regulation can influence investment decisions.
What Do the Figures Really Tell Us?
The latest data does not prove that the Renters’ Rights Act has caused the rise in landlord possession claims.
It also does not show that landlords are suddenly facing a widespread mortgage crisis.
In fact, the opposite is true when it comes to mortgage distress. Buy-to-let arrears have fallen by 26% over the past year, while lender possessions have also declined.
At the same time, more landlords have started court proceedings to recover their properties.
The key takeaway is that landlord possession claims and mortgage arrears measure different problems.
Some possession cases will involve tenants who have fallen behind with rent or breached their tenancy. Others may involve landlords who are selling, moving into the property or responding to changes in the economics of renting.
The next set of figures could provide a clearer picture.
The Q3 data will include the final transitional deadline for older Section 21 cases and a longer period under the new tenancy system.
If landlord possession claims remain elevated while buy-to-let mortgage arrears continue to fall, the figures could raise an important question for policymakers:
Are more landlords struggling to keep their properties, or are more financially secure landlords deciding that the current conditions no longer make letting property worthwhile?
That distinction could become increasingly important as the Renters’ Rights Act continues to reshape the private rented sector.
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