The number of mortgage arrears across the UK continued to decline during the first quarter of 2026, although home repossessions increased slightly compared with the previous quarter, according to the latest figures from UK Finance.
Despite the modest rise in repossessions, the banking industry body said overall levels remain well below historic averages, highlighting the continued resilience of the mortgage market.
Homeowner Repossessions Edge Higher
During the first three months of 2026, 1,250 owner-occupied properties were repossessed. This represents a 3% increase compared with the previous quarter and is 2% higher than the same period last year.
Buy-to-let properties also recorded a small increase, with 810 repossessions during the quarter. This was 5% higher than the previous three months, although the figure was unchanged compared with the first quarter of 2025.
UK Finance stressed that repossessions remain relatively uncommon by historical standards and continue to be used only after all other support options have been explored.
Mortgage Arrears Continue to Improve
While repossessions increased slightly, the overall number of borrowers falling behind on their mortgage repayments continued to fall.
The proportion of residential mortgages in arrears remained low at 0.91%, while arrears among buy-to-let mortgages stood at 0.47%.
Across the residential market, 79,110 homeowner mortgages were in arrears of at least 2.5% of the outstanding balance during the first quarter. That represents a 2% fall compared with the previous quarter and a 12% reduction year-on-year.
The buy-to-let sector also showed further improvement, with 8,960 mortgages in significant arrears. This was 6% lower than the previous quarter and 24% below the level recorded a year earlier.
Levels Remain Far Below Financial Crisis Peak
UK Finance pointed out that current arrears remain significantly lower than those experienced during the global financial crisis.
At the height of the financial downturn in 2009, there were around 216,400 homeowner and buy-to-let mortgages in arrears, demonstrating how much stronger current repayment performance remains.
The organisation also noted that most repossessions now involve older mortgages, with more than two-thirds relating to loans originally taken out at least ten years ago.
In many long-running cases where borrowers have experienced prolonged financial difficulty, repossession may provide an opportunity to settle the mortgage while preserving as much equity as possible.
Higher Mortgage Costs Continue to Create Pressure
Although some lenders have recently reduced mortgage rates, borrowing costs remain elevated following recent volatility in financial markets.
Interest rates rose as geopolitical tensions in the Middle East increased uncertainty, and while pricing has eased slightly, affordability remains a challenge for many households.
James Tatch, head of analytics at UK Finance, said the continued fall in mortgage arrears is encouraging for both homeowners and landlords.
He added that although repossessions have increased marginally, they remain low by long-term standards.
Mr Tatch encouraged anyone experiencing financial difficulties to contact their lender as early as possible, noting that lenders are committed to providing tailored support to customers before problems become more serious.
Early Support Remains Essential
Mary-Lou Press, President of NAEA Propertymark, also warned that affordability pressures remain a concern, particularly while inflation and wider global uncertainty continue to influence interest rate expectations.
She said homeowners who are worried about meeting their repayments should seek help immediately rather than waiting until their financial situation worsens.
Both UK Finance and Propertymark emphasised that speaking with lenders early remains one of the most effective ways for borrowers to access support and avoid more serious financial consequences.
Download NOW
4 Simple Steps To Becoming Wealthy Through Property