New data from UK Finance has shown that there were 87,380 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance in the second quarter of 2025, 3 per cent fewer than in the previous quarter.Within the total, there were 29,840 homeowner mortgages in the lightest arrears band (representing between 2.5 and 5 per cent of the outstanding balance). This was 3 per cent fewer than in the previous quarter.
There were 11,270 buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance in the second quarter of 2025, 5 per cent fewer than in the previous quarter.
Within the total, there were 4,100 buy-to-let mortgages in the lightest arrears band (representing between 2.5 and 5 per cent of the outstanding balance). This was 6 per cent fewer than in the previous quarter.
Mortgages in arrears accounted for 1.00 per cent of all homeowner mortgages outstanding, and 0.58 per cent of all buy-to-let mortgages outstanding in the second quarter of 2025.
Although 1,340 homeowner mortgaged properties were taken into possession in the second quarter of 2025, 10 per cent greater than in the previous quarter, the numbers remain significantly less than the long-term average. 790 buy-to-let mortgaged properties were taken into possession in the second quarter of 2025, 2 per cent fewer than in the previous quarter.
UK Finance Director of Mortgages Charles Roe said “Arrears are continuing to fall across both homeowner and buy-to-let mortgages, reflecting resilience in the market. The proportion of mortgages in arrears also remains below long-term averages, even amid the current economic uncertainty.
“Lenders remain committed to helping customers manage their payments, and we urge anyone concerned to contact their lender early. Support is always available and exploring available options with your lender will not affect your credit score.”
Separate data from the Ministry of Justice reveals that there have been increases in mortgage possession claims by 22% when compared with the same quarter in 2024.
For StepChange clients in mortgage arrears, the average level of arrears in the year to date now stands at £11,531, and forms one of the largest common arrear types. When compared with 2024, this has increased from £10,239 (12%), and £6,054 in 2023 (90%).
Adam Butler, Public Policy Manager at StepChange said “Whilst interest rates are coming down, along with mortgage arrears, many are still struggling. With possessions rising, we are concerned that those in debt could be pushed further into crisis.
“If you are worried about managing your mortgage payments, do not hesitate to contact your lender who has a regulatory responsibility to help– which may look like forbearance or wider support. If you are struggling with debts or your finances more generally, a charity like StepChange is on hand to guide you through your journey with free advice.”