The number of homeowner mortgages in arrears in the UK saw a decline in Q1, new UK Finance figures have revealed.

There were 79,110 homeowner mortgages in arrears in arrears of 2.5% or more of the outstanding balance in Q1, a total 2% down compared to Q4 2025.

Within the total, there were 27,290 homeowner mortgages in the lightest arrears band, which UK Finance classes as those representing between 2.5% and 5% of the outstanding balance. This was 2% lower compared to the previous quarter.

The banking trade body also revealed there were 8,960 buy-to-let (BTL) mortgages in arrears of 2.5% or more of the outstanding balance in Q1 2026, 6% compared to the final quarter of last year.

In total, mortgages in arrears accounted for 0.91% of all homeowner mortgages outstanding, and 0.47% of all BTL mortgages outstanding, in Q1.

President of NAEA Propertymark, Mary-Lou Press, commented: “While it is positive news to hear mortgage arrears sit lower during the first quarter of this year than they did within the quarter directly previous, it is, however, important to acknowledge future affordability constraints, especially concerning current global unrest.

“The current rate of inflation remains a key concern, and the impact this may have on the base rate remains to fully play out yet.

“Should homeowners find themselves in a position where they are worried about repayments, they should proactively speak with their lender at the very first opportunity, as they have a duty to help where possible and will also be keen to do so.”

Divisional director at Spicerhaart Corporate Sales, David Miller, added: “The good work of lenders is on show once again as we see arrears cases fall across all bands in Q1. While this is clearly great news, we do have to address the elephant in the room. The landscape is changing rapidly with the ongoing Iran conflict derailing the future path of interest rates and inflation.

“In recent months, we have seen the number of instructions coming to us has increased – particularly for support with assisted voluntary sales. With no signs of an end to this conflict and inflation likely to climb further, lenders must keep that laser focus on forbearance, arrears management and proactive intervention and support.”

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