Credit, Collections & Insolvency News
Latest UK Finance research has found that around 5,160 mortgaged properties were repossessed in 2025, a 39% increase from 2024.
The fourth quarter saw 1,210 homes repossessed, up 17% year-on-year but down 13% from the previous quarter. Despite this rise, only 0.92% of all mortgages were in arrears. The report highlighted that most repossessions involved older mortgages, with over two-thirds dating back at least a decade.
In the fourth quarter of 2025, there were 80,490 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance. This was a four per cent decrease compared with Q2 2025. The overall proportion of mortgages in arrears remains low, at 0.92 per cent of homeowner mortgages and 0.5 per cent of BTL mortgages.
Within this total, 27,780 homeowner mortgages were in the lightest arrears band (representing between 2.5 and 5 per cent of the outstanding balance), four per cent fewer than in the previous quarter.
The number of BTL mortgages in arrears also fell, down nine per cent compared with the previous quarter, to 9,520. Within this total, 3,480 BTL mortgages were in the lightest arrears band, seven per cent fewer than in the previous quarter. For comparison purposes, the number of homeowner and BTL mortgages in arrears in Q2 2009, the peak in arrears numbers during the global financial crisis, was 216,400.
James Tatch, Head of Analytics at UK Finance, said “The number of mortgages in arrears continued to fall in Q4, with BTL arrears down 25 per cent compared to the end of 2024, and homeowner arrears down 13 per cent. We have also seen a decline in possessions in Q4 due to lenders’ commitment to keep people in their homes over the Christmas period. As ever, the number of possessions remain low by historic standards and are broadly in line with pre-pandemic levels.
“Lenders remain committed to supporting customers who may be struggling. If you are worried about your mortgage payments, please contact your lender as soon as possible to discuss the tailored help available.”
David Miller, Divisional Director at Spicerhaart Corporate Sales, said “The positive momentum continues on arrears with yet another drop in both residential and BTL cases. Given the expected path of both mortgage rates and the bank rate, it’s hoped that this will continue to be the pattern. It’s certainly helped by the proactive work of lenders to intervene early with support. High LTV product choice at an 18-year high may still alarm some with long memories, but we’re in a strong position with economic conditions improving and lenders more than ready to provide proactive support.
“It’s positive to see a drop in possessions on the previous quarter in part due to the December moratorium – albeit still up on the previous year. On the ground, we are seeing increasing challenges around leasehold apartments, with the number coming into possession rising over the last 12 months and now accounting for nearly 50% of the properties we are managing. Severe service charges and doubling ground rent are the tip of the iceberg of issues for lenders, which lead to repossession and then significantly reduce demand or interest from buyers or BTL investors. That’s on top of increasing difficulty dealing with management companies, causing delays and additional expense.
“If we are serious about keeping possessions low and as a last resort for lenders, we need to tackle the leasehold reform head on. As we’ve seen, leasehold is a growing driver behind these decisions and an area where reform is desperately needed for all parties. It’s another reason why lenders need trusted partners with real expertise in asset management – particularly in this complex area of the market.”
