UK Mortgage Arrears and Repossessions Decline in Q2 2026

The industry body UK Finance reported a decline in mortgage arrears and home repossessions for the second quarter of 2026. Homeowner repossessions fell to 1,150, marking an 8% decrease from the previous quarter and a 14% annual drop. Buy-to-let repossessions saw a sharper decline, falling to 630, which represents a 22% quarterly and 20% annual decrease. Data shows that over two-thirds of these repossessions involved mortgages arranged at least ten years ago.

Mortgage arrears of 2.5% or more also declined, with 77,940 homeowner mortgages and 8,390 buy-to-let mortgages reaching that threshold. Industry leaders attribute this trend to lender forbearance and early engagement with borrowers. Mark Harris of SPF Private Clients noted that the downward trend continues despite rising mortgage rates linked to the Middle East conflict.

Despite the positive data, officials caution that affordability remains a challenge. Ian Harris of NAEA Propertymark warned that financial pressures continue to affect homeowners and landlords, emphasizing that early engagement is essential to resolve difficulties before they escalate.