Recent data from UK Finance reveals a significant 14% increase in buy-to-let (BTL) repossessions in the third quarter of 2025. According to the figures, approximately 900 BTL mortgaged properties were repossessed, a notable rise compared to the previous quarter.
While this uptick in repossessions may raise concerns, UK Finance sought to reassure the public by emphasising that these figures are still well below the long-term averages. The current repossession levels are largely in line with the figures seen during the five years before the pandemic, offering some perspective in the face of these figures.
A Slight Increase in Homeowner Repossessions
Alongside the rise in BTL repossessions, the number of homeowner properties taken into possession has also seen a modest increase. In Q3 2025, a total of 1,390 homeowner mortgaged properties were repossessed, marking a 4% rise from the previous quarter.
However, despite this increase in both BTL and homeowner repossessions, UK Finance remains confident that the overall figures are not alarming. They point out that the rise is still minor in comparison to the longer-term historical trends and that repossessions remain low by historical standards.
Reassurance from UK Finance
The organisation has taken steps to ease any anxiety by clarifying that repossession levels are generally in line with those observed in the years leading up to the COVID-19 pandemic. UK Finance’s assessment is that the figures should not be cause for widespread concern, as the market remains relatively stable.
Moreover, UK Finance has also pointed out that lenders have continued to show strong support for borrowers, even as repossessions tick up slightly. Their ongoing commitment to helping those who are struggling with their mortgage payments has been reiterated, offering some relief to those facing difficulties.
A Drop in Buy-to-Let Arrears
Despite the increase in repossessions, another positive indicator is the drop in buy-to-let arrears. In Q3 2025, the number of BTL mortgages in arrears fell by 8% compared to the previous quarter. This reduction brings the total number of BTL arrears to 10,420 accounts, which is a positive sign for the broader property investment sector.
Light Arrears Reductions in BTL Mortgages
Of the 10,420 BTL mortgages in arrears, 3,750 mortgages were in the lightest arrears category, which represents a 9% reduction from the previous quarter. This suggests that fewer landlords are facing significant financial strain, as the majority of arrears are now concentrated in the least severe category.
This decline in arrears aligns with the general trend of improving mortgage health among landlords, which UK Finance views as a positive development in an otherwise challenging environment. It also hints at greater financial stability among landlords, who are better able to manage their property portfolios in the face of rising costs and inflation.
The Proportion of Mortgages in Arrears Remains Low
Overall, the proportion of mortgages in arrears remains relatively low. For homeowners, the rate of arrears stands at just 0.97%, while the figure for BTL mortgages is even lower at 0.54%. These figures are a reassuring reflection of the health of the property market, especially when compared to the global financial crisis in 2009.
In that year, mortgage arrears peaked at 209,600 across both the homeowner and BTL sectors, a far cry from the current numbers. The significant reduction in arrears since the crisis highlights the resilience of the UK property market in the face of economic challenges.
A Comparison with the Global Financial Crisis
To put the current arrears numbers into context, it’s worth comparing them to the figures seen during the 2008–2009 global financial crisis. Back then, the number of homeowner and BTL mortgages in arrears reached a staggering 209,600, which was the highest point during the crisis.
By contrast, the most recent figures show a sharp reduction in the number of mortgages in arrears, which suggests that the current economic environment is much more stable than it was during the recession. This is a reassuring development, especially for those concerned about the potential for widespread repossessions.
A Positive Outlook from UK Finance
Charles Roe, the Director of Mortgages at UK Finance, offered a positive outlook on the latest figures. He stated that the decline in arrears since Q1 2024 is a good sign for the future of the housing market, and he stressed that lenders remain dedicated to supporting customers who may be struggling financially.
He further explained that while the rise in repossessions is concerning, most of the properties taken into possession were linked to mortgages arranged more than ten years ago, rather than recent borrowers. This highlights the fact that the market has remained relatively stable despite these small fluctuations.
Ongoing Support from Lenders
Roe continued to reassure borrowers that lenders are still committed to offering assistance to customers facing financial hardship. “If you are worried about your mortgage payments, it’s important to contact your lender as soon as possible,” he advised.
He stressed that there are various tailored support options available to help borrowers avoid the worst-case scenario, including the possibility of repayment holidays or other temporary measures to alleviate financial pressure.
The Stability of the Property Market
Despite the rise in repossessions, the overall outlook for the property market remains positive. UK Finance points to the decline in arrears and the relatively low proportion of mortgages in arrears as strong signs that the market is healthy and functioning well.
The figures for both BTL and homeowner repossessions remain below long-term averages, further indicating that the market is experiencing a period of relative stability. With the backing of lenders, who continue to provide support to struggling borrowers, the property market should be able to weather any future challenges that arise.
Implications for Landlords and Homeowners
For landlords and homeowners alike, the latest data provides a mixed picture. While repossessions have risen slightly, this has been offset by a reduction in arrears and a stable overall mortgage market. Landlords, in particular, can take comfort in the fact that the proportion of BTL mortgages in arrears remains low, even if repossessions are higher than expected.
Homeowners should similarly find some reassurance in the overall health of the mortgage market, as the rise in repossessions is relatively modest when compared to previous downturns.
The Road Ahead for the Housing Market
Looking ahead, UK Finance remains optimistic about the housing market’s prospects. While there are always risks in any market, the continued fall in arrears and the low level of repossessions provide a strong foundation for future stability.
For landlords and homeowners, this suggests that the immediate future of the property market is unlikely to see major disruptions. However, UK Finance advises all borrowers to remain vigilant and to stay in communication with their lenders to avoid any potential issues.
Conclusion: A Stable Market Despite the Rise in Repossessions
In conclusion, while the rise in repossessions is a concern, the overall picture remains one of stability. The decrease in arrears and the low percentage of mortgages in arrears point to a healthy market, and UK Finance continues to offer support for those who need it.
For landlords, homeowners, and investors, this provides reassurance that the housing market is in a much better position than it was during the global financial crisis. The continued decline in arrears and the low number of repossessions are key indicators of a resilient market, and UK Finance’s commitment to helping borrowers means that the outlook remains positive.
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