The number of homeowner mortgages in arrears fell by 4% in Q4 2025 compared to the previous quarter, new UK Finance figures have shown.

Data from the banking trade body revealed there were 80,490 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in Q4.

Within this total, there were 27,780 homeowner mortgages in the lightest arrears band – which represents those between 2.5% and 5% of the outstanding balance – a figure also 4% down compared to the previous quarter.

UK Finance also reported that there 9,520 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in Q4, 9% fewer than in Q3.

Mortgages in arrears accounted for 0.92% of all homeowner mortgages outstanding, and 0.5% of all buy-to-let mortgages in Q4 2025.

Chief executive of mortgage broker SPF Private Clients, Mark Harris, commented: “Despite significant pressure on household finances, the number of mortgages in arrears and homes repossessed fell in the fourth quarter of last year.

“Six base rate reductions in the past 18 months have undoubtedly eased affordability. With two or three more potential cuts forecast in base rate this year, this should further alleviate the pressure on borrowers.”

UK Finance also reported that 1,210 homeowner mortgaged properties were taken into possession in Q4 last year, a total 13% down compared to Q3, and one that remains significantly below the long-term average.

Harris added that the UK Finance figures also suggest lenders are “showing forbearance” and working with borrowers to try and find a solution when they find themselves in difficulty.

“For a lender to take repossession of a property really is the last resort – they would much prefer an open dialogue way in advance of this needing to happen,” he continued. “There may be options open to the borrower, whether it is just a blip or a longer-term issue, such as a payment holiday, switching to interest only for a while or extending the mortgage term.

“However, it is important that this conversation is started sooner rather than later and that borrowers don’t ignore the problem as that will only make matters worse.”

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