Fewer people falling behind with mortgages, but repossessions rising

The number of people falling behind with their mortgage payments is falling, but more homeowners are having their property repossessed.

According to UK Finance, 84,100 homeowner mortgages were in arrears of 2.5 per cent or more in the third quarter of 2025.

That’s 4% down on the previous quarter.

Figures also showed that the overall proportion of mortgages in arrears remains low at 0.97%.

What’s behind this improvement?

UK Finance believes the downward trend is partly due to the support being offered to customers by mortgage lenders.

“Lenders remain committed to supporting customers who may be struggling,” Charles Roe, director of mortgages at UK Finance.

He added that anyone who’s worried about their mortgage payment should contact their lender as soon as possible to discuss what help is available.

Possession numbers up, but low by historic standards

Although mortgage arrears have fallen, 1,390 homeowner mortgaged properties were repossessed in the third quarter of 2025.

This is 4% up on the previous three-month period.

But although these numbers have increased slightly, UK Finance has pointed out that they’re well below long-term averages.

“They predominantly relate to mortgages arranged more than 10 years ago and remain low by historic standards and broadly in line with pre-pandemic levels,” Mr Roe said.