Pressure on mortgage borrowers showed signs of easing between April and June 2026. The number of mortgages in arrears declined compared with the previous quarter, and fewer mortgaged properties were taken into possession.

The improvement was visible among both homeowners and buy-to-let landlords, although tens of thousands of borrowers remain behind on their repayments.

Homeowner Arrears Decline

There were 77,940 homeowner mortgages in arrears equivalent to at least 2.5% of the outstanding balance during the second quarter.

That was 1% fewer than in the first three months of the year.The decline was also visible among borrowers in the earliest stage of serious arrears. Around 27,100 homeowner mortgages were between 2.5% and 5% behind on the outstanding balance, also down 1% from the previous quarter.

This lighter arrears category is important because it can provide an early indication of whether more households are beginning to experience repayment problems. For now, the figures suggest that the situation has stabilised rather than deteriorated.

Most Borrowers Remain Up to Date

Mortgages in arrears represented 0.89% of all outstanding homeowner mortgages.

In other words, fewer than one in 100 homeowner loans fell into the reported arrears categories. Although mortgage difficulties remain serious for affected households, arrears continue to represent a relatively small proportion of the overall market. Borrowers can fall behind for many reasons, including changes in household income, higher living costs or rising mortgage payments after moving onto a new interest rate.

The latest decline therefore points to some easing in financial pressure, rather than a complete end to repayment difficulties.

Buy-to-Let Arrears Fall Faster

The improvement was stronger in the buy-to-let sector. There were 8,390 buy-to-let mortgages in arrears of at least 2.5% during the quarter, 6% fewer than three months earlier. The number in the lightest arrears category dropped 7% to 2,980. Overall, only 0.44% of outstanding buy-to-let mortgages were in arrears.

Fewer Homes Taken Into Possession

Possessions also moved lower. During the second quarter, 1,150 homeowner properties with mortgages were taken into possession. That represented an 8% decline from the previous quarter.

Importantly, the level remains significantly below the long-term historical average. Buy-to-let possessions fell even more sharply. A total of 630 mortgaged rental properties were taken into possession, 22% fewer than in the first quarter.

A Gradual Improvement

The figures provide a more encouraging picture than a simple focus on the total number of households in arrears might suggest. Both homeowner and buy-to-let arrears declined, fewer borrowers entered the lighter serious-arrears category, and possessions moved lower.

However, nearly 78,000 homeowner mortgages remain significantly behind on payments. For those households, even a stable national trend does not remove the immediate difficulty of meeting monthly repayments.